Insurance firm told to refund Rs 15 lakh to 83-year-old Udupi man misled on policy, additional Rs 20,000 for mental harassment

Time of India

4 days ago

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UDUPI: The Udupi District Consumer Disputes Redressal Commission has ordered an insurance company to refund Rs 15 lakh to a senior citizen and pay an additional Rs 20,000 as compensation for mental harassment and legal expenses.
Dr Ravindranath Shanbhag, President of the Human Rights Protection Foundation (HRPF), Udupi, told reporters on Thursday that Annappa Poojary, 83, a resident of Belur in Kundapur taluk, used to run a business in Hubballi for his livelihood.
After suffering a paralytic stroke 15 years ago, he returned to his hometown and began living with his wife. Although he had children, they were not financially capable of supporting their parents, forcing Poojary to sell his property in Kundapur.
After the sale, he decided to deposit the proceeds of Rs30 lakh in fixed deposits, intending to live off the interest income. When Poojary consulted an insurance agent, he was advised to invest the amount in the "Pradhan Mantri Vaya Vandana Yojana" (PMVVY), a subsidised scheme for senior citizens.
T
he agent assured him that the scheme offered higher returns and allowed premature withdrawal in case of emergencies.
Trusting the agent, Poojary invested his entire Rs30 lakh under the condition that he would be able to withdraw the amount if needed. Soon after, he received two policies of Rs15 lakh each. Being illiterate, Poojary and his wife could not read the policy documents, which were in English, and relied solely on the agent's assurances.
Months later, when Poojary checked his passbook, he noticed that the first deposit earned Rs9,250 in interest, while the second earned only Rs 6,519.
When questioned, the agent failed to provide a proper explanation. Already battling paralysis, Poojary was also diagnosed with Parkinson's disease.
He frequently had to travel 45 km to Manipal for treatment. The combined interest of around Rs 15,000 from both deposits was insufficient to meet his medical and living expenses.
He decided to withdraw the lower-interest policy and repeatedly contacted the insurance company's office and the agent.
Receiving no response, he formally requested the surrender of one of the policies on January 11, 2023.
He was shocked to discover that the policy, purchased on September 6, had a surrender value of only Rs10,73,412 after 16 months, meaning he would lose Rs4,26,588. He claimed he was never informed about the massive penalty for premature withdrawal.
He then sought assistance from the HRPF, Udupi. The foundation guided him to file a complaint with the Udupi District Consumer Commission.
Shanbhag said the company argued that the first policy was under the PMVVY, while the second was under a different plan. They claimed the policyholder had a 15-day 'free-look' period to cancel the policy but failed to do so. However, the company could not produce any evidence that these terms were ever explained to the illiterate Poojary couple, he added.