The Madras High Court Bench here has directed the Life Insurance Corporation (LIC) to honour an award passed by the Insurance Ombudsman in Chennai on December 31 last and refund the purchase price of Rs.2.43 lakh paid for a single premium pension plan by a policy holder, who was subsequently diagnosed with cancer.
Allowing a writ petition filed by T. Nachiar, Justice V. Bharathidasan held that LIC could not insist on deducting Rs.58,224, already paid to the petitioner towards interest, from the amount ordered to be refunded on ex gratia basis. The judge directed the corporation to repay the entire award of Rs.2.43 lakh within two weeks.
The petitioner had taken Jeevan Akshay VI policy by paying a single premium of Rs.2.43 lakh on June 28, 2012. Though he was eligible for pension under the policy, the petitioner did not find any need for it after being diagnosed with cancer. On the other hand, he required money instantly for treatment.
Hence, he made a request to the Senior Divisional Manager of LIC here expressing his willingness to surrender the policy and urged him to repay the surrender value. The plea was rejected on the ground that as per a circular issued by LIC’s Central Office on December 1, 2012 all pension policies issued from May 16, 2012 would not be eligible for surrender.
The petitioner made an appeal to the Chairman of LIC on June 15 last, but there was no response. Thereafter, he approached the Insurance Ombudsman and obtained an order last December for refund of Rs.2.43 lakh as a special case in full and final settlement of the claim. Yet, the LIC offered to pay him only Rs.1.84 lakh.
The LIC contended that the interest amount already paid to the petitioner must be necessarily deducted from the award passed by the ombudsman. The judge refused to accept the contention and said: “The award does not permit the second respondent [senior divisional manager] to deduct the interest amount.”
Says the corporation cannot insist on deducting the amount paid as interest to petitioner.(News Courtesy: TheHindu)