Jeevan Saral: LIC Pays Up Rs26.67 Lakh After Chairman is Summoned by Consumer Commission
Moneylife Digital Team 14 January 2020
In a major breakthrough for consumers, the insurance behemoth, Life Insurance Corp of India (LIC), paid up Rs26.67 lakhs, which was the entire money owned to a Jeevan Saral policy holder, when the Maharashtra State Consumer Commission issued a summons to its chairman. 
Noted consumer activist and columnist Jehangir Gai fought this case and helped Deepak Rajmal Kothari to get entire maturity value as mentioned on the policy, loyalty bonus and 9% interest. 
Mumbai-based Deepak Rajmal Kothari had taken LIC's Jeevan Saral Policy (with profits). The policy mentioned the maturity value as Rs25 lakh, death benefit as Rs3,94,900, and accident benefit as Rs15 lakh. For the 11 year term, Mr Kothari paid total premium of Rs13.65 lakh to LIC. 
However, after maturity LIC offered to pay just Rs3.94 lakh plus Rs1.68 lakh as profit or loyalty addition. When Mr Kothari contested, LIC told him that due to typographical error, the maturity and death benefit values had got interchanged in his Jeevan Saral policy. 
Thousands of policy holders feel badly cheated by the Jeevan Saral policy and it is an issue that Moneylife Foundation had taken to the Supreme Court. However, consumer courts have proved the better forum because LIC has not succeeded at the national commission and has avoided going back to the Supreme Court. 
LIC's Jeevan Saral, which used to be a hot-selling insurance product for agents, until it was withdrawn, is a controversial product. In fact, Jeevan Saral was a traditional product that could make the entire premium (money paid) disappear! This can happen in many policies during surrender or making it ‘paid-up’, but, in the case of Jeevan Saral, it has happened even at policy maturity.
Responding to an application filed under right to information (RTI) act, LIC had admitted that during 4 February 2004 to 30 September 2017, total number of policies completed under its Jeevan Saral plan are 4,97,45,861 (4.97 crore).
Moneylife Foundation sent a memorandum to IRDAI on 18 August 2018, pointing out that Jeevan Saral (with profit), a traditional policy, has caused senior citizens to lose as much as 65% to 70% loss of the money invested over 10 years.
Coming back to the big success at the State Commission, Mr Gai says, "LIC had approached the National Consumer Disputes Redressal Commission (NCDRC) against the decision from Maharashtra State Consumer Redressal Commission. However, LIC's appeal was dismissed by the NCDRC. Finally, we initiated execution proceedings for holding the chairman and managing director of LIC criminally liable for wilful disobedience of the order. And as soon the summons were served through the police, LIC complied and paid up the entire amount."
On 27 July 2015, LIC also issued a circular asking all its offices to retrospectively correct all the Jeevan Saral Policies issued from 2003 onwards. 
Mr Gai says the state consumer commission rejected LIC's contention and asked the insurer to pay Rs26.67 lakh with an interest of 9% per annum from the date of maturity of the policy (28 March 2015) and additional Rs50,000 as costs towards litigation and compensation for mental pain and agony. 
LIC, however, contested the state commission order before the NCDRC and contended that its Jeevan Saral policy was issued in accordance with table 165.
 The counsel for LIC argued that otherwise also, the death claim amount should be much more as compared to the maturity amount. "Actually, in the policy these amounts have been inadvertently interchanged and the complainant is trying to take the advantage of this typing error," the counsel submitted.
Prem Narain, presiding member of NCDRC, in an order issued on 11 December 2018, observed that it may be true that the policy is issued under table 165 of the LIC, however, it has been admitted that the table was not supplied along with the policy document and therefore the insured may not be having any inkling that he may not get the amount mentioned in the policy. 
"There was no communication made during the policy period by the insurance company mentioning the mistake in the policy document. It is only after the policy has matured and question of payment of maturity amount cropped up, the insurance company has raised the issue of typing error in the policy document. If any typing error is brought to the notice of the other party by any party before the claim becomes due, it can definitely be considered with the consent of both the parties," the NCDRC said.
The bench also noted that the typographical mistake cannot be justified on the basis of table 165 of LIC. It says, "It is seen that this table was not part of the policy and was not supplied along with the policy document, therefore, the complainant may not be bound by this table, and rather, the complainant and the insurance company both are bound by the written contract of the policy as mentioned in the policy document."
The NCDRC also cited some judgements from the Supreme Court, which clearly stated that the terms and conditions of the policy cannot be changed or interpreted differently by any forum and particularly when there is no obvious reason for accepting the alleged typographical error in the policy.
Mr Gai says, after the NCDRC order, LIC constituted a high power committee to decide on what ought to be done. "We also waited for over six months to see if LIC would approach the Supreme Court, but it did not file any special leave petition (SLP). Also there was no communication regarding the high power committee. This is when we decided to initiate execution proceedings under section 27 of the Act, holding the LIC's chairman and MD criminally liable for wilful disobedience of the NCDRC order."
"As soon the summons were served through the police, LIC complied and paid up the entire amount (to Mr Kothari)," Mr Gai added.
As Moneylife reported, following a public interest litigation (PIL) filed by Moneylife Foundation in the Supreme Court, LIC on 9 July 2019 issued a circular asking all its offices to take on a war footing , a verification drive for correcting "printing" mistakes in maturity sum assured (MSA) under its Jeevan Saral policy. 
LIC says in the circular that its software development centre (SDC) has devised a program to identity Jeevan Saral policy bonds wherever printing mistake had occurred in matured sum assured-MSA. "The program has been designed to extract all Jeevan Saral policies of the division, with status 21 (in force) and 31 (reduced paid up) where MSA is less than death sum assured (DSA). The initial step is to run extraction option. This one time job is to be done immediately, after office hours," the circular says. (Read: Jeevan Saral: LIC Wants to Know How Many Policies Are Flawed. Asks Officers to Finish the Task Before 31st July)
As highlighted by Moneylife, LIC's Jeevan Saral, which used to be a hot-selling insurance product for agents, until it was withdrawn, is a controversial product. In fact, Jeevan Saral was a traditional product that could make your premium (money paid) disappear! This can happen in many policies during surrender or making it ‘paid-up’, but, in the case of Jeevan Saral, it has happened even at policy maturity. (Read: Life Insurance: LIC Jeevan Saral: A Toxic Product)
Many LIC consumers have written to us asking about the next course of action. The big victory secured by Jehangir Gai, a well-known consumer activist who appears before the State and National Consumer Commissions, seems the best option for investors and Jeevan Saral policy holders. 
Those who want to seek Mr Gai’s help on a professional basis can write to [email protected] for his contact details. Moneylife Foundation is also exploring the option of joining the petition and working to create a class- action. 
However, as of now, based on the success in the earlier case, consumers would be best guided if they seek professional help. 
About Mr Jehangir Gai
Mr Gai has been actively associated with various consumer organizations since 1984-85 and has been fighting for consumer causes even before the Consumer Protection Act was passed. 
He has appeared before the district, state and national consumer commission on numerous occasions. 
He has also filed several Writ Petitions in the Bombay High Court regarding the problems faced litigants in consumer courts as well as the non-functional State Consumer Protection Council with positive results.
In recognition of his contribution to the consumer movement, he was awarded the Government of India's National Youth Award for Consumer Protection 1993.   
6 months ago
Replied to M J SHAH comment 6 months ago
You may find out ph nos & email of Dealing offices & Grievance settlement officer or n your area or region from website. They do not reply properly on ph but all people may not be always bad. Write or tell & record your complaint to IRDA, Hyderabad & get ack no. & dt. Follow after two wks on oh & ask for reply. It will send complaint to LIC of India but not give written reply. If still not happy, write to Insurance Ombudsman. First send letters to company & get ack. Make copies & send three or four as needed to Ombudsman with your complaint. Get ack. Appear for hearing. The first choice is best. If it is easy to go there, first phone thrice, threaten, coax, cajole, etc., & then go.
9 months ago
Should all policy holder not get entire maturity value as mentioned on the policy, loyalty bonus and 9% interest similar to Mr. Deepak Rajmal Kothari as verdict should be same for all citizens?
9 months ago
I am also holder of Jeevan Saral and don't see any bounce even after 10 years in LIC App, I did saw bounce in December 2021 but it has stopped showing since Jan 2022, has anyone seen this happening with their policy. Can I surrender my policy since I have completed 10 years already? My policy term is 35 years, is there any penalty if I surrender now(after 10 years)?
11 months ago
1 year ago
I Have 4 police of jeevan saral of my father mother still they have talk your S.A. of Rs.125000 but Maturity Value Just 19000/- nearest per policy so Please Help us atlish I want to my paid amount refund relise from LIC , Please Help Us......
1 year ago
I am also affected above Jeevan saral policy no.604326973 as I had not received my actual premium amount paid by me Rs.121300/- but matured amount received mentioned in the copy of the policy Rs.1,01,870/- only difference of Rs.20600/- approximately (shortly).
Replied to cvr.123 comment 1 year ago
Short matured amount received mentioned Rs.1,01,870/- though I had paid actually amount Rs.1,21,300/- . We do not know before taking this policy, but only came to know at the time of maturity of the policy after sending the final report from the LIC Branch.
2 years ago
Sir, my father is of 70 years, he paid the premium for all 11 years under Jeevan saral policy and now ended up not receiving atleast the paid amount.please advise. Thank you
2 years ago
Sir I am also affected above policy ,
Maturity and bonus not given...
Proper intemation not given in LIC poilcy bond
Any other updates will help me
2 years ago
I am an affected Policy Holder of LIC Jeevan Saral, issued on 01/03/2011 maturing on 01/03/2021. Awaiting MATURITY Value of ₹7,50,000/- + Add on Bonus on 1st. March 2021.

I paid total premium of Rs. 3,60,300/- [Rs. 36030/- yearly for ten years].

No intimation/maturity claim papers from LIC. After waiting for long, on enquiry through LIC agent, an Basic amount of Rs. 1,42,320 + Interim Bonus of Rs. 60,486/- = Total payable is Rs. 2,02,806/-.

I want Advice to proceed further. Also wanted to know fee/expenses for legal case against LIC. I am resident of Delhi /NCR region.
2 years ago
Sir any update on lic jeevan saral policy , I have a policyholder of this scheme I was invested nearly 1.1 lakh during 11 installment but it is showing maturity value as 33566 only. Kindly advise me ....
2 years ago
I am also,an affected Policy Holder of Jeevan Saral.Awaiting MATURITY Value of ₹10+ Lakhs,during February 2021.But, a SMS from LIC, received 2days back,states the MATURITY Value as ₹3.17Lakhs.
I want Advice to proceed further.
2 years ago
Mari Jeevan saral 21/3/2008 to 2022 .15 sal primum aur 2023 maturity Lekin Mene jitna primum bhara he utnabhi vapas nahi milta me kya Karu
Sitaram Goyal
3 years ago
It’s greatest helps to sufferers,thanks to moneylife
Anil Patel
3 years ago
I feel better now, its a positive msg for all costumers who taken j.saral....most agents are also facing belonging this problem, how to face with our custs with this matter....thxs to all them, who were involved in this case....they fought for ordinary peoples.....
Anil Kumar
3 years ago
Great work Moneylife. Thank you.
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