LIC Jeevan Saral: Moneylife Foundation Files Petition in Supreme Court Seeking Refund of Premiums for Policyholders
A public interest litigation (PIL) filed by Moneylife Foundation was heard by the Supreme Court on Thursday. The bench of Chief Justice Ranjan Gogoi and Justice Deepak Gupta deferred the matter to 15 July 2019 as per request from senior counsel Arvind Datar, representing Moneylife Foundation.
 
The PIL filed on behalf of thousands policyholders of Jeevan Saral, seeks to have Life Insurance Corporation of India (LIC) and Insurance Regulatory Development Authority (IRDA) to "amend to Jeevan Saral Plan 165 policy maturity to repay all the premium paid along with bank saving rate at 8% per annum to all the existing Policy holders of the Jeevan Saral Policy."
 
The petition also seeks recall of LIC Jeevan Saral by IRDAI. 
 
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highlighted by Moneylife, LIC's Jeevan Saral, which used to be a hot-selling insurance product for agents, until it was withdrawn, is a controversial product.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. 
 
A senior citizen couple got just one-third of the premiums paid over the years. 
 
The Jeevan Saral product, which has gobbled up hard-earned savings of policyholders (especially senior citizens) have also agitated LIC agents and their association. Despite innumerable letters, protests and objections, LIC has not budged so far. 
 
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. 
 
From the Memorandum, IRDAI, highlighted four points in its letter to LIC and termed them as being of a 'serious nature'. These are:
 
1. The proposal form did not have any provision to mention the (lower) maturity sum assured; instead it had a provision only for the higher death benefit.
 
2. The maturity benefit was not printed on even the policy documents.
 
3. The agents, as well as some LIC officers were not aware of the plan in general, and the fact that customers may get lesser money than the total premium paid.
 
4. The prospective customers were not informed at the time of sale that the higher insurance coverage provided by the product would lead to poor (negative for those in the higher age group) returns. 
 
Moneylife Foundation also sent copies of the Memorandum to the Finance Minister as well as the insurance regulator. The financial services department in the ministry, which looks after insurance matters, on 28 September 2018, forwarded the Memorandum to IRDAI asking its chairman to take appropriate action. 
 
It has also asked IRDAI to inform the ministry about action taken (on the Memorandum) with regard to the Jeevan Saral policy and inform both, Moneylife Foundation and the ministry. 
 
Moneylife Foundation has received a one-line reply to its memorandum from the LIC chairman VK Sharma, which says, "We appreciate the concerns raised by you in your letter dated 1 October 2018. It will be dutifully looked into."
 
However, there is no further response from either LIC or the insurance regulator, which forced Moneylife Foundation to approach the highest court seeking justice for crores of policyholders.
 
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    COMMENTS

    pravinismyfriend

    9 months ago

    Good work done by you. Update me what are you doing after decision of SC at my mail.

    Manjiv Sharma

    2 years ago

    LET THE COURT TAKE THE CALL IN COMMON INTEREST OF ALL.

    BUT JEEVAN SARAL IS A GREAT PLAN.

    ITS A PURE TERM & ENDOWMENT COMBINATION.

    SO, UNLIKE TERM PLAN
    IT DOES RETURN OF AN AMOUNT.

    WHICH IN CASE OF TERM PLAN IS LOST ( LOSS A CONSEPTION, NOT A FACT).

    PL ASK WIDOWS WHO RECEIVED THE 250 TIMES CLAIM
    ( BIGGER THAN ANY TRADITIONAL ENDOWMENT, IN SAME PREMIUM ,TERM).

    I FEEL IN COURT LIC WILL WIN. ON PRODUCT GROUND.

    AS PRODUCT IS PASSES BY IRDA AFTER DUE SCRUTINITY.

    NO FLAW IN PRODUCT TERM & CONDITION.

    FOR EXAMPLE:

    TAKE SAME PREMIUM & TERM & COMPARE IT WITH OTHER ENDOWMENT PLANS OF ALL LIC & PRIVATE INSURANCE CO.

    PARAMETERS AS:

    1.PREMIUM :SAME
    2.TERM:SAME

    3. RISK COVER= SARAL IS. BETTER
    4. MATURITY= SARAL IS BETTER.

    AS LA DEPENDS UPON MORTALITY & INVESTMENT RETURNS.

    LONG TERM WAS BETTER.


    BUT

    AS ON DATE NOW:
    SARAL PLAN IS CLOSED FOR NEW SALE.

    THE EFFECT ON MORTALITY WILL BE ADVERSE.

    AS IT WAS DESIGNED TO BE AN OPEN ENDED PRODUCT.
    IN EASY TERM: WITH NEW LA ENTERENCE THE AGERAGE AGE REMAIN CONSTANT ( PROBABILITY) BUT NOW THE AVG AGE OF POLICY HOLDER WILL RISE. RESULTING INTO MORE CALIM.

    EVENTUALLY: ITS BETTER TEN A TERM PLAN WHERE .NO RETURNS ON MATURITY.


    ANYWAYS:
    ITS IN FAVOUR OF POLICY HOLDER.

    MU JUDJMENT:
    THOSE WHO GOT THE CLAIM,

    FLEXIBILITY IN WITHDRAWL

    INTEREST OF 7% ON LAPSES .

    POLICY(BROKEN PERIOD).

    250 TIMES THE RISK COVER.

    PARTIAL WITHDRAWL

    SAME PREMIUM FOR ALL AGE.


    TERM + ENDOWMENT COMBINATION

    ITS WAS A GREAT MIX OF NEED & WANTS.
    COURT IS THE BEST PLACE, WE ALL WILL RESPECT & ABIDE BY ITS GOOD DECISION.

    NOTHING WRONG IN GOING TO COURT OF LAW. IF CASE OF ANY DOUBT.

    GOOD INITIATIVE
    NICE JOB.

    BEST WILL PREVAIL.














    REPLY

    Sanjay Buche

    In Reply to Manjiv Sharma 2 years ago

    Nicely explained.
    Most of the people are commented without the knowledge of this product,and the besic concept of life insurance as well.
    Half knowledge is dengerous.

    Amit Kumar

    In Reply to Sanjay Buche 2 years ago

    You are absolutely right, most people are commenting without the knowledge of the product. But tell me who is responsible to share the details of the product?? Is it the customer's who should know the details on their own or that agent should tell the details in detailed manner to a customer before selling any product. The agents have only misguided the customers on behalf of LIC and LIC should accept its fault.

    MDT

    In Reply to Sanjay Buche 2 years ago

    Thanks for your comment. Are you the same Sanjay Buche, who is shown as ABM at Life Insurance Corporation of India? (https://in.linkedin.com/in/sanjay-buche-52585791?trk=public_profile_samename_mini-profile_title) Have you ever thought about policyholders, especially from your own family or friend circle who would have lost money due to hyped selling by LIC?

    MDT

    In Reply to Manjiv Sharma 2 years ago

    Thanks for your comment. Are you the same Manjiv Sharma, who is shown on LinkedIn (https://in.linkedin.com/in/manjiv-sharma-71a80819) as development officer of LIC? In that case, we request you to think for a second about your agents and their clients, especially those above 50 years, who have lost money in this scheme. Also a normal comment is fine with us and our other readers, instead of using all capital letters.

    Amit Kumar

    In Reply to Manjiv Sharma 2 years ago

    Dear Sir,

    What you said is totally true. But one thing is also true that the mentioned plan was not sold as term plan. Nobody knew its more of a term plan and less of a traditional plan. And while selling also returns were discussed instead of cover as regarding to term plans.

    Regards

    Sanjay Buche

    2 years ago

    Jeevan saral is a very nicely designed insurance plan.
    Thanks to LIC for this inovative product.
    Main concern is not understanding of this product.
    Basically Insurance policies are for Insurance cover.and not for higher returns.
    In term insurance policies nothing will be payable at maturity,This does not mean that Term insurance is bad for return.
    Can anybody file a case for no returns in term policies.
    Risk premium increases with age and death sum assured.
    Higher the age higher will be the risk premium.
    If any body opts for insurance at higher age ,naturally the premium amount towards risk will be higher.
    Jeevan saral plan of LIC is very nicely designed innovative product and was awarded at various platform.
    It is absolutely wrong to say about this plan.
    Please understand the product first and then comment.
    This plan gives good return as compared to other product, for lower age at entry . Returns will be less for Higher age at entry.
    It is quite obvious that higher the age higher will be the probability of risk of being died.
    In Many policies of Jeevan saral LIC settled the death claim.

    REPLY

    Prashant Doshi

    In Reply to Sanjay Buche 2 years ago

    Very shameful blind sale by a trustworthy corporation in India due to the poor knowledge of the team heads for the agents..

    Prashant Doshi

    In Reply to Sanjay Buche 2 years ago

    This product was sold in the market without mentioning it's side effects ...Because of the poor study by the sellers and their Superior officers only interested in new business more and more

    Rishabh Adukia

    2 years ago

    Extremely sad state of affairs by LiC and ministry , nobody is taking accountability
    A policy holder must be given an option to surrender and take money back along with Interest
    Request others to join in this mission

    Lalit Khurana

    2 years ago

    I was holding this Jeevan saral policy from last 6 years and have just surrendered this a month back only and have not even got what all I have paid in the last 6 years....Can I also file any complaint regarding this ? Please confirm

    REPLY

    Sucheta Dalal

    In Reply to Lalit Khurana 2 years ago

    You can join out complaint by filing an affidavit - write to [email protected] and we will send you a draft that you have to fill and send back. It is in your interest to do so, especially since there will be no cost to you.

    Prashant Doshi

    In Reply to Sucheta Dalal 2 years ago

    The proposal review slip-on the policy docket don't contain the amt of Maturity SA within mentioned even in the written decision by officers and the definition of The word Maturity SA is mentioned nowhere

    Prashant Doshi

    In Reply to Prashant Doshi 2 years ago

    No morality charges are ever mentioned using any table in the policy document

    Amit Kumar

    2 years ago

    I also own a policy of Jeevan saral and continuing since 2013. While selling the LIC agent showed a chart containing returns starting from 10 years to 35years and said the returns are good. Which worked as a catalyst for me to invest in such a policy. Now I'm reading all these about the policy. Kindly guide me what to be done as of now.

    REPLY

    Aditya Joby

    In Reply to Amit Kumar 2 years ago

    Hi!

    Thanks for your comment. I am a part of Moneylife, and hope I can resolve your issue regarding the Jeevan Saral Policy you have. Here is the link to a maturity calculator, created by an independent agency (so all your doubts are alleviated).

    https://www.investobite.com/maturity-calculator/lic-jeevan-saral-plan-165.html

    If you still believe that you have been cheated, please send us a mail at [email protected], with the subject:"Attn: Yogesh/Aditya Jeevan Saral".

    Prashant Doshi

    In Reply to Amit Kumar 2 years ago

    Age below 45 yrs at the inception of the policy need not worry about returns

    Anil Kumar

    2 years ago

    What is the number of policy affected / premium amounts gobbled up by LIC in this. An article headlining this will probably wake more people up / get regulatory and finance ministry cranking.

    REPLY

    Sucheta Dalal

    In Reply to Anil Kumar 2 years ago

    We are in the Supreme Court because no amount of writing, cover stories, RTI and memorandums worked. It is a long process. You may want to read these two articles of 2017 and 2018 to know the hard work that has gone behind the litigation.
    2017: https://www.moneylife.in/article/life-insurance-lic-jeevan-saral-a-toxic-product/50333.html
    2018: https://www.moneylife.in/article/will-lic-be-made-to-pay-for-the-horrible-mis-selling-of-jeevan-saral/53802.html

    google within our site and you will find more!

    Panch Deo Pandey

    2 years ago

    I support money life foundation, thank you for supporting us. I believe, we will get a justice.

    Panch Deo Pandey

    2 years ago

    As a L I C agent I have sold this policy to many people almost my relatives and I also buy this policy. This is very hazardous for us.

    REPLY

    Prashant Doshi

    In Reply to Panch Deo Pandey 2 years ago

    Wait and watch...the mass fraud shall be opened at SC

    Sucheta Dalal

    In Reply to Panch Deo Pandey 2 years ago

    Mr Pandey, do write to [email protected] so that those who have this policy can join the petition free of charge. WE are sending affidavits for them to send to their clients. This needs to be done before 10 July since case comes up on 15th July. You can also call 49205000 and speak to Mr Yogesh Sapkale today. We are sending out draft affidavits today

    Bhushan Dhingra

    2 years ago

    Please update me as well as I have also invested in this policy and I am hardly getting anything back. Kindly update how and where to register a complaint against this.

    REPLY

    Aditya Joby

    In Reply to Bhushan Dhingra 2 years ago

    Hi!

    Thanks for your comment. I am a part of Moneylife, and hope I can resolve your issue regarding the Jeevan Saral Policy you have. Here is the link to a maturity calculator, created by an independent agency (so all your doubts are alleviated).

    https://www.investobite.com/maturity-calculator/lic-jeevan-saral-plan-165.html

    If you still believe that you have been cheated, please send us a mail at [email protected], with the subject:"Attn: Yogesh/Aditya Jeevan Saral".

    SANDESH PAWAR

    2 years ago

    Although I don't own the policy, I would like to give big "Thank you" on behalf of the policy holders. I am proud to be associated with an organisation like yours.

    Vikas Gupta

    2 years ago

    Gr8...

    Harish

    2 years ago

    Great Work MoneyLife!

    Pradip Chinnakonda

    2 years ago

    Please update.

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