[Resolved] Lic Of India — Non-Refund of Lapsed policies after Maturity Period.

Life Insurance Corporation of India [LIC]

[Resolved] Lic Of India — Non-Refund of Lapsed policies after Maturity Period.

Ashok B. Bhansali from Hosur, Tamil Nadu

Dear Sir, LIC is Public Sector Unit and it is still with-holding crores of rupees of the policies which could not be continued for contractual period and they have made mandatory clause that the residual amount of premium shall be forfeited. When policy holder can not derive any benefit such as bonus, claims, loan and other withdrawals, then it is essentially possible for them to make an arrangement for refund of the amount of policies after the maturity period. Corporation may be asked by Ministry concerned or IRDA to make public announcement to make an arrangement to refund of deposited amount by deducting permissible administrative expenses for maintaining records either to policy holder or to their nominees. It is not very much difficult for them to trace the addresses and location after giving public announcement. Will LIC show business ethics to refund the amount payable to their policy holders? It will be great public cause if they do so! Thanking you, Yours faithfully, Ashok Bhansali. Was this information helpful? No (0) Yes (0)
Aug 14, 2020 Complaint marked as Resolved
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Comments

Raghavendra Kamath

from Bengaluru, Karnataka

Insurance is contract between 2 parties, one the insurer and the insured. When the insured fail to pay the instalment premiums when due, the policy becomes partially paid. As per the standard rules of business, if the policy has been funded with continuous 3 years' instalment premiums, it gets paid up value till the first unpaid premium. The insured can again recommence the policy by paying arrears of instalment and interest, if any within the stipulated period. Or otherwise it remains as partially paid up and can be surrendered by application from the insured or otherwise it becomes payable by the insurer as on the date of completion of policy term.

Hence the insured should take care whether to continue the premium payment or not. If he decide to not to continue the payement can take surrender value or keep the insured updated regarding his whatabouts so as to facilitate the insurer to send the paid value as on stipulated date. Usually insurer doesn't make any fault in paying the claim.