Typo error costs big to LIC, directed to pay Rs 26.67 lakh dues to aggrieved consumer

State consumer grievances redressal forum has directed LIC to pay its dues to a consumer who was not paid due to a typographical error in LIC’s Jeevan Saral insurance Scheme ordinance.

Mumbai:Rejecting insurance claim filed by a consumer for the typo mistake has been proved to be costly for Life Insurance Corporation (LIC). The state consumer grievances redressal forum has directed LIC to pay Rs. 26.67 lakh to the consumer Deepak Kothari.

Jahangir Ghai, who fights consumer grievances, had argued in the consumer forum on the behalf of Kothari.

Mumbai resident Deepak Kothari had enrolled for LIC’s Jeevan Saral insurance Scheme (including profit). He was supposed to get the benefits of Rs 25 lakhs after the completion of the insurance term, in case of death Rs 3,94,000 and in case of accident Rs 15 lakh under the insurance scheme. Kothari had paid Rs 13.65 lakh to LIC as premium.

After the completion of the insurance scheme, LIC conveyed Kothari that he would be paid only Rs. 3,94,000 and Rs. 1,68,000 as profit.

Following this, when Kothari persuaded in LIC, his claim about the total insurance amount was rejected on the grounds of typo mistake.

LIC explained to him that, the amount to be paid after the death was mentioned as the amount on the completion of the term by mistake in typing.

State consumer grievances redressal forum has directed LIC to pay Rs 26.67 lakhs to Deepak Kothari. It also directed to pay the amount by the annual interest of 9% since 28 March 2015 and separate 50 thousand rupees as the cost of mental trauma and legal expenses.

LIC had filed an appeal in National Consumer disputes redressal forum. But, NCDRC also rejected LIC’s appeal.

Jahangir Ghai said that LIC had appointed a high-level committee to pay insurance amount to Deepak Kothari. We waited for six months as we thought LIC would go to the Supreme court. But, it did not happen.

"The high-level committee of LIC never discussed the matter with the consumer. So, we decided to start the process of filing a criminal complaint against LIC chairman and managing director on account of contempt of NCDRC," said Ghai.

Ghai also alleged that there was no typo mistake in the insurance scheme, but LIC deliberately did it.

Jeevan Saral insurance scheme has around 4.97 crores consumers and LIC has tried to save its face by explaining a typing mistake in its ordinance.

It also recalled its insurance scheme from the customers and informed them that it needs correction.

When it came to the fore that thousands of consumers have been cheated, MoneyLife Foundation filed an appeal in the Supreme court.

From February 4 to September 30, 2017, Rs. 4.97 Crores consumers have registered for this scheme, according to the available data under the RTI query.