Coimbatore, Nov 7: The Coimbatore District Consumer Disputes Redressal Forum (CDCRF) has imposed a fine of Rs 5,000 as compensation for mental agony and Rs 1,000 towards the cost of litigation besides asking the Life Insurance Corporation (LIC) of India to settle a life insurance claim of Rs 5 lakhs with 9 per cent interest. The order was passed by the President of CDCRF, S A Sreeramulu and members P Mathavi and K Rathinam while disposing of a petition filed by F Barkath Banu wife of late S Habib John under Section 12 of the Consumer Protection Act.
The complainant in her averments stated as follows; S Habib John had taken an life insurance policy "Jeevan Mitra Double Cover Endowments plus Profits plus Accident Benefits in June 2002 for a sum of Rs 5 lakh.
The policy holder had paid the premiums promptly but died of a massive cardiac arrest on November 13.
On his death, his wife F Barkath Banu the petitioner approached the LIC of India claiming the insurance benefit on December 6, 2003.
The LIC of India repudiated the claim on the following grounds; the policy holder was diabetic and had taken medical leave during his employment on two occasions for fifteen days and eight days in June 1999 and in May 1999.
The policy holder had wilfully and wantonly concealed the above facts while furnishing the proposal.
The petitioner claimed that the policy holder had taken the said life policy only after an interval of three years from the said period of leave and that too after examination by a doctor nominated by LIC and the doctor had certified that the sugar levels were within normal limits.
The opposite parties in their counter averred as follows; the claim was treated as an earlier claim since it came within two years from the date of risk (i.e., within one year and five months from the date of commencement), a statutory investigation as per procedure was conducted to look into the admissibility of the claim.
Citing the diabetic complaint and dental care, LIC of India contended that the policy holder had misled LIC by not stating the truth in his proposal while seeking insurance cover.
The consumer forum concluded that after adhering to the procedural formalities and accepting the proposal after a medical examination, suppression of facts not relating to the death (i.e., ailments that existed prior to the policy commencement) was not adequate grounds for rejection of claim.