Insurance firm asked to pay 5 lakh for misleading consumer

Thursday, June 30, 2011   |    2 Comments
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Punjab: A leading insurance company was Thursday ordered by a consumer forum in Punjab to pay back Rs.5 lakh to a customer for misleading him by not explaining the terms and conditions of his policy. "My client Sarabjit Singh had purchased a life insurance policy of Rs.5.5 lakh in 2010. The insurance agent told him that he was required to pay Rs.5 lakh in the first year and remaining amount in the next four years," said lawyer H.S. Tiwana. "However, after paying Rs.5 lakh last year, Sarabjit came to know that he had purchased a wrong policy and he was supposed to pay Rs.5 lakh every year for the next four years. My client approached the insurance company but they refused to help him and said that he cannot terminate the policy," he added. In the argument, counsel for the Kotak Life Insurance said Sarabjit had signed the documents after going through all the terms and conditions. However, the forum held the insurance company guilty of misleading Sarabjit and directed it to refund the amount along with nine percent interest and Rs.5,000 as litigation cost.
Source: IANS
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Reader's comments(2)
1: It is not like that. We should know the things when weying. There is a choice to pay for initial years and choice not to pay after that. For ex ULIPS - we can pay for 3 y and wait 15 yrs till maturity. another option is pay all the years and collect morns. so study the policy then give the cheque.
Posted by:deepak - 30 Jun, 2011
2: not only kotak mahendra, almost all the life insurance companies are not cheating the people like this. their agents tell the clients that they don't have to pay premium every year but in fact they are compelled to pay premium every year. the clients mostly illeterates do not go through the policy and simply sign the policy without being aware of its contents thereby the innocent policy holders in thousands lose their hard earned money to the cheating insurance companies.
Posted by:k velayutham - 30 Jun, 2011
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