29-05-2025
LIC directed to refund entire investment to an octogenarian for lack of informed consent
The Udupi District Consumer Disputes Redressal Commission recently directed the Life Insurance Corporation of India (LIC) to refund ₹15 lakh invested by an octogenarian, as the insurance corporation had failed to obtain informed consent from him before selling the policy.
Udupi Human Rights Protection Foundation president Ravindranath Shanbhag told reporters at Udupi on Thursday that 83-year-old Annappa Poojary from Beluru in Kundapura taluk wanted an assured income after selling his property in 2021. Earlier, he was running a business in Hubballi, but returned to his native after suffering a paralytic stroke.
After selling the property for livelihood, he contacted an agent of the LIC, Kundapura branch, to invest the sale proceeds of ₹30 lakh to earn interest. The agent advised him to invest in 'Pradhan Mantri Vaya Vandana Yojana' (PMVVY), a subsidised scheme for senior citizens. Mr. Poojary invested the entire sum with LIC on the condition that he could withdraw the amount if needed. He received two policies for ₹15 lakh each on September 6, 2021, but was unable to read the terms and conditions as they were in English.
Upon checking his bank passbook months later, Mr. Poojary noticed that the first deposit earned ₹9,250 in interest, while the second earned only ₹6,519 per month for the same amounts. The agent failed to answer his queries. As the combined interest was insufficient to cover his expenses, including treatment for Parkinson's disease, he wanted to surrender the second policy. To his shock, LIC informed him that the surrender value was ₹10,73,412 after 16 months.
Dr. Shanbhag said that Mr. Poojary approached the foundation after making many failed attempts to have his investment refunded. The foundation initiated a case before the Consumer Commission in Udupi, which on May 21, 2025, directed the LIC to refund Mr. Poojary's entire investment along with ₹20,000 towards compensation for mental agony and legal expenses.
While the first policy was issued under PMVVY, the second one was issued under LIC's Jeevan Akshay Scheme, which had different terms and conditions and a lower interest rate. Neither the LIC nor the LIC agent explained this to Mr. Poojary, Dr. Shanbhag said.
