LIC penalised Rs 25,000 by Consumer Court

Panchkula, December 7

Denying claim to a widow on frivolous basis against the policy of Rs 5 lakh owned by her husband cost dear for the LIC of India.

The forum comprising Ashok Kumar Jain, president, and member SP Singh directed the company to pay a penalty of Rs 25,000, along with Rs 5, 000 as cost of litigation, to the complainant.

Neelam Chopra, wife of late Rakesh Chopra, a resident of Mohali, in her complaint, stated that her husband had submitted a proposal form (Ex C-1) for insurance of his own life on January 24, 2003. He was medically examined by doctors on the same day. He was then issued a policy worth Rs 5 lakh on February 21. Rakesh, however, died in April, 2004.

However, the LIC of India repudiated the claim of the complainant on the ground that the deceased had suppressed material information regarding his health at the time of effecting the policy and also on the ground that the claim had become time barred.

The complainant, on the other hand, submitted that the deceased had neither concealed any disease nor was having any symptom or existence of any such disease. He died due to cardio respiratory arrest and infection.

The forum said the claim of the complainant for the recovery of policy amount from the insurance company was wrongly and illegally rejected.

Even the confidential report given to a doctor at the time of taking the policy did not mention any pre-existing disease as such. The onus to prove that the deceased had suppressed the facts was on the insurance company after the lapse of two years from the date of issuance of policy which it failed to discharge by leading any evidence, said the forum. Accordingly, it had to be held that there was no suppression of facts at the time of taking of the policy in 2003, added the forum. As far as the second ground that the claim had become legally time barred was concerned, the same fell flat as the claim had been presented within a period of three years as required, observed the forum.