Hyderabad: LIC asked to pay Rs 5.20L to policyholder’s family for arbitrarily rejecting insurance claim
Along with the principal amount and interest, LIC has also been ordered to pay Rs 10,000 as compensation for mental agony and Rs 10,000 towards legal expenses, all within 45 days
By - Sistla Dakshina Murthy
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Hyderabad: Hyderabad District Consumer Commission–I has asked Life Insurance Corporation of India (LIC) to pay the assured sum of Rs 5 lakh with 9% annual interest, along with compensation and litigation costs to policy policyholder's family for arbitrarily rejecting the claim.
Commission slams LIC for unjustified denial
The Commission held that LIC failed to provide any evidence to prove its allegation that the policyholder had suppressed pre-existing ailments at the time of purchasing the policy. It, therefore, termed the rejection “unjustified” and “baseless.”
Along with the principal amount and interest, LIC has also been ordered to pay Rs 10,000 as compensation for mental agony and Rs 10,000 towards legal expenses, all within 45 days.
Policyholder’s medical timeline contradicts LIC claim
M Shivakumar of Hydernagar had purchased an LIC Jeevan Lakshya policy on July 5, 2021, paying an annual premium of Rs 30,521. He duly paid premiums for 2021 and 2022.
On August 30, 2021, he was admitted to Srikara Hospital with health complications and diagnosed with TB pericarditis. He was discharged on September 4.
Later, on October 11, 2021, he was admitted to AIG Hospital, where doctors diagnosed Stage-4 lung cancer. He continued treatment but passed away on August 6, 2022. Following his death, his wife, Kalpana, filed a claim.
LIC alleges suppression of cough symptoms
LIC rejected the claim, alleging that the policyholder had concealed a pre-existing cough at the time of buying the policy. The Insurance Ombudsman upheld LIC’s stand, prompting Kalpana to approach the Consumer Commission.
However, the Commission observed that Shivakumar’s first hospitalisation occurred nearly two months after the policy was purchased, and LIC had submitted no medical records to support its claim of pre-existing illness.
It concluded that the insurer had failed to prove any non-disclosure on the part of the policyholder.
Verdict in favour of Policyholder
Stating that LIC’s rejection amounted to a deficiency in service, the Commission ruled entirely in favour of Kalpana and ordered LIC to comply with its directions within 45 days.
