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Saturday, Dec 14, 2019

Typo in insurance contract costs LIC Rs 35.52L payout

The National Consumer Disputes Redressal Commission has upheld an order issued by the Maharashtra State Consumer Commission, directing the public sector insurance company to pay Mumbai resident Deepak Kothari Rs 26.92 lakh with interest at the rate of 9% per annum from March 2015, as maturity amount.

mumbai Updated: Dec 19, 2018 09:41 IST
Kanchan Chaudhari
Kanchan Chaudhari
Hindustan Times, Mumbai
LIC claimed that the sum of Rs 25 lakh was the death benefit under the LIC Jeevan Saral policy and Rs 3.94 lakh was the maturity amount, but inadvertently these figures were wrongly written in the policy document.
LIC claimed that the sum of Rs 25 lakh was the death benefit under the LIC Jeevan Saral policy and Rs 3.94 lakh was the maturity amount, but inadvertently these figures were wrongly written in the policy document.(Reuters File )
         

A typo is set to cost the Life Insurance Corporation (LIC) of India Rs 35.52 lakh.

The National Consumer Disputes Redressal Commission (NCDRC) last week upheld an order issued by the Maharashtra State Consumer Commission, directing the public sector insurance company to pay Cumbala Hill resident Deepak Kothari Rs 26.92 lakh with interest at the rate of 9% per annum from March 2015, as maturity amount.

In 2004, Kothari had taken a policy from the Surat branch of LIC. The policy matured in March 2015, but LIC refused to pay the Rs 25 lakh, and instead offered Rs 3.94 lakh — death benefit under the policy — coupled with loyalty addition of Rs 1.67 lakh.

Relying on Table-165 of the contract, LIC claimed that the sum of Rs 25 lakh was the death benefit under the LIC Jeevan Saral policy and Rs 3.94 lakh was the maturity amount, but inadvertently these figures were wrongly written in the policy document.

NCDRC presiding member Prem Narain refused to accept LIC’s argument. “The complainant has paid a total premium of Rs 13.65 lakh and it stands to logic that the complainant may get about Rs 25 lakh on maturity. Clearly, this does not stand to logic that after paying Rs 13.65, one gets only Rs 3.94 lakh as maturity amount along with some loyalty addition of Rs 1.67 lakh.”

“The typographical error in the contract does not seem to be obvious and even if justified, it is seen that this table was not part of the policy and was not supplied along with the policy document, therefore, the complainant may not be bound by it,” he added.

In June, Kothari had approached the state consumer commission which ruled in his favour and instructed LIC to pay the complainant a total of Rs 35.32 lakh.