LIC told to pay up over faulty increase in annual premium

District Consumer Disputes Redressal Forum directed Life Insurance Corporation of India to refund around Rs 82,500 along with 9% interest per annum and pay Rs 35,000 as compensation for changing the annual premium amount of the insurance midway, despite assurance that it will remain the same till the end of the policy term.

The complainant Mahesh Kumar Goyal, stated that he had taken Amulya Jeevan-I policy with an annual premium of Rs 16,050 for a term of 25 years. At the time of taking the policy, the complainant was specifically told by the agent that the premium would not be changed till the date of last premium that was November 28, 2035. Thereafter, the complainant paid premium for five years.

It was alleged that LIC through its letter dated July 21, 2016 unilaterally raised the premium from Rs 16,050 to Rs 25,350 per annum and desired the complainant to pay arrears of Rs 46,500 towards difference of premium. He submitted a complaint to LIC against the said enhancement, but to no avail.

LIC in its reply said, “The insurance policy was underwritten by the zonal office and as per the underwriting decision the actual premium came out to be Rs 25,350 instead of Rs 16,050. However, inadvertently at the time of accepting the proposal, the revised premium of Rs.25,350 was not corrected in the computer system, so the premium of Rs 16,050 was continued to be paid by the complainant until pointed out by the audit team in the year 2016-17.

LIC was then directed to refund the entire amount of premiums paid by Goyal along with interest at the rate 9% per annum. They were also asked to pay Rs 25,000 as relief and Rs 10,000 as litigation cost.