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LIC Made to Pay Back

01-29-2013 06:38 PM CET | Business, Economy, Finances, Banking & Insurance

Press release from: Akosha

‘Consumer Tadka’ by the public grievance forum reports the lapse by LIC in fulfilling its duty and paying the Mediclaim policy amount to its customer resulting in death.

The incident, according to ‘Consumer Tadka’ was highly condemned by the Delhi State Consumer Commission which explicitly stated “We have deprecated this practice of insurance companies of taking a flimsy clue or remote reference from the discharge summary or statement with a view to reject the rightful claim of the insured. It appears that this is how the respondent (LIC) has become one of the richest organizations in India.” The Delhi Consumer Commission also reminded the LIC that the main source of its revenue is its premium-paying-customer and that “propensity to become unjustly rich by rejecting their claims” is immensely deplorable.

This extreme reaction from the Consumer Commission was evoked by the incident of a woman’s death due to rejection of insurance claim. The woman died due to an infection after the surgery for the removal of her uterus. LIC refused to pay the claim amount stating that she failed to mention having undergone angiography before getting the policy. However, on in her defence, the insurance company had conducted enough medical tests to ensure whether the she is fit to be insured. The Commission sternly observed that the only reason the payment wasn’t discharged was for the inconvenience of losing business. The Commission also maintained that it is the insurer’s duty to make sure that the potential consumer is fit to be insured before issuing the policy. In the light of these arguments, LIC is ordered to pay a sum of Rs.4 Lakh as compensation and Rs.20 Lakh as the policy complaint amount.

In a similar case, LIC was found have denied a policy holder’s claim accusing her on non-payment of premium leading to a policy lapse. According to the reports, the policy-holder was a widow who was refused payment on shaky grounds. However, upon deeper inquiry the Consumer Commission figured that her payments had been made and her policy had not lapsed. For this deficiency on LIC’s behalf, the Consumer Commission ordered the insurance company to pay the woman a compensation of Rs.15,000 and the policy amount of Rs. 3 lakh and an additional litigation cost of Rs.2,000.

The above information by ‘Consumer Tadka’ is a part of , which brings all the information required to protect the interests of the consumer. To stay informed in all the consumer rights matters, one can log in to Akosha. It is majorly an online consumer forum for resolving consumer disputes. Consumer can file a report or a complaint with the website for any consumer grievance issue. The website is an alternative to the consumer court and can be trusted to give a resourceful guidance and reliable help in the area of grievance. One can check the website at for more information on the subject.

Akosha is the best online consumer complaints resolution platform from India. You can find here solution of all complaints like airlines, banking , insurance, e-commerce, travel, business and many more. We have listed all consumer court address at our website which help you to find consumer court in your area. If you need more information then please visit our website

F-10, Basement of Andhra Bank,
Kalkaji Main Road,
New Delhi – 110019
Landline 011 64643453

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