LIC to pay Rs 4L for rejecting claim on "fanciful ground"

The New Delhi District Consumer Disputes Redressal Forum ordered the Life Insurance Corporation of India (LIC) to pay the compensation while condemning its act of rejecting the claim and terming its official, who repudiated the claim, as one of "irresponsible mindset."

The LIC had rejected the claim on alleged ground of suppression of pre-existing disease, despite having medically examined and cleared the insured before issuing the policy, said the forum.

"The ground of repudiation had been found from the leave application of deceased in his office. In the application, he took leave due to abscess in cheek, a trivial discomfort, as not any disease. This is alleged as suppression of material fact and pre-existing disease," said the forum presided by C K Chaturvedi.

"The rejection on such a fanciful ground is in line with the mindset of irresponsible officials, who think they serve their employer well by harassing consumers. We condemn this act of opposite party (LIC) and holding the LIC guilty of deficiency in service, direct it to pay assured sum of Rs three lakhs for death of the insured," the bench said.

The order of the forum came on a complaint by Gurgaon resident Bimla Devi, who had alleged that the LIC had arbitrarily rejected her claim for assured amount after the death of her husband in March 2005.

She had said that her late husband had bought the life insurance policy from the LIC and had also paid two premiums prior to his death.

Allowing the woman's complaint, the bench directed the LIC to pay her the assured amount of Rs three lakh along with Rs one lakh as compensation for her harrasement for seven years that she underwent due to rejection of her claim after her husband's death.

"To teach a lesson to the (concerned) LIC official, we direct LIC to deduct 50 per cent of the Rs one lakh from the salary of the officer who okayed the repudiation," it added.