State consumer body orders IOB, LIC to compensate family over denied life insurance benefits- The New Indian Express


Express News Service

THIRUVANANTHAPURAM: The State Consumer Disputes Redressal Commission (SCDRC) has ordered the Indian Overseas Bank (IOB) and Life Insurance Corporation of India (LIC) to give Rs one lakh compensation to the family of a deceased home loanee for denying life insurance benefits.

It directed both organisations to liquidate the entire dues of the deceased. The benefits were denied under the pretext that the loanee had suppressed information on his liver ailment. The five petitioners in the case included the wife, minor children, and mother of the deceased P. Ashokkumar from Thiruvananthapuram.

The IOB had sanctioned a term loan of Rs 10 lakh to Ashokkumar and his wife for constructing a house. The loan agreement was signed on July 30, 2012.

On the same day, as persuaded by the bank, Ashokkumar had submitted an application for membership in a life insurance scheme offered by the LIC.

He had also submitted a declaration stating that he did not have any illnesses.

The IOB sanctioned Rs 10,64,640 as a housing loan, inclusive of the one-time premium for the insurance coverage. The first phase of the loan, Rs 3 lakh, was sanctioned on July 30, 2012.

Later, Ashokkumar became sick and was subjected to gastro-intestinal surgery at a Kochi hospital on March 16, 2013, and was discharged on April 10, 2013. However, he passed away on December 19, 2013.

The petitioners said they stopped loan repayment as per the advice of the bank. Later, the bank transferred Rs. 1,17,619 from the savings bank account of the complainant without her consent.

The LIC, however, denied the claim, citing that the insurance claim was issued only on July 25, 2013, four months after Ashokkumar underwent the surgery. It said Ashokkumar did not disclose this fact in the declaration on his health. Advocates S. Reghukumar and P. Babu represented the petitioners.

The Commission bench, comprising judicial member Ajith Kumar D and member KR Radhakrishnan found a deficiency on the part of the bank and LIC.

The bank, which accepted the consent letter and declaration for insurance from Ashokkumar on July 30, 2012, remitted the premium to LIC only on July 25, 2013.

The commission also noted that the LIC had not raised any objection to the declaration made by Ashokkumar on July 30, 2012.

The order directed the bank and LIC to jointly liquidate the entire loan dues. The bank should give back the money it illegally recovered from Ashokkumar’s wife’s savings bank account. Both the bank and LIC should jointly pay Rs 1 lakh in compensation and Rs 10,000 as costs to the family.

Follow The New Indian Express channel on WhatsApp

Source link


Please enter your comment!
Please enter your name here