Life Insurance Corporation to pay Rs 6.5L for “deliberately” rejecting claim

The Life Insurance Corporation (LIC) of India has been directed by a consumer forum here to pay Rs 6.5 lakh to a widow for rejecting her insurance claim on her late husband’s policy “deliberately and arbitrarily”.


The New Delhi District Consumer Disputes Redressal Forum held that the denial of assured sum of Rs five lakh to the widow, Kiran Gandhi, was unlawful and in violation of the contract law.

“We have gone through all relevant records and it appears that opposite party (LIC) knowingly / deliberately and arbitrarily repudiated the genuine claim of the complainant which is totally injustice / unlawful and in violation of the contract law, which is punishable.

“We direct LIC to pay a sum of Rs five lakhs (to Gandhi). We also award Rs 1.5 lakh (to her) as compensation for mental agony and harassment as well as litigation charges,” said the bench presided by C K Chaturvedi.

Kiran Gandhi, a resident of Vasundhra Enclave in East Delhi here, had said in her complaint that she had bought an LIC policy in November 2004 in her husband’s name under the Salary Saving Scheme for an assured sum of Rs five lakh.

She had said her husband had regularly paid the monthly instalments of Rs 4,104 till he expired in May 2007.

When she filed the claim, the LIC rejected it on the ground of pre-existing ailments like ENT problems, disk pain and chronic alcoholism, she told the forum.

The LIC, in its written statement too, had contended that her husband was suffering from pre-existing diseases.

The forum, however, rejected the LIC’s contention saying “LIC’s contention in its written statement is not supported by any evidence or documents of evidence”.

It also directed that of the Rs 1.5 lakh compensation to be paid by LIC, Rs 50,000 should be deducted from the salary of Branch Head who had issued the policy and Rs 25,000 from the salary of Claim Manager who had “deliberately repudiated” the claim in a prejudiced manner to harass the consumer.”

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