Bad printout costs LIC lakhs

Bad printout costs LIC lakhs

The Royapettah branch of the insurer had issued a policy document to one P Subramanian in 2010, in which the maturity amount was mentioned as Rs 62.5 lakh.

Published: 03rd June 2020 06:07 AM | Last Updated: 03rd June 2020 06:07 AM | A+A A-

By Siva Sekaran

Express News Service

CHENNAI: A good computer printout does not cost more than Rs 10. But a bad one has cost the Life Insurance Corporation (LIC) of India a few lakhs. The interesting case was disposed by the Madras High Court on Monday. The Royapettah branch of the insurer had issued a policy document to one P Subramanian in 2010, in which the maturity amount was mentioned as Rs 62.5 lakh.

Subramanian had been paying a monthly premium of whopping Rs 31,153 for eight long years, thinking the maturity amount was way over Rs 60 lakh. Much to his shock, he was informed at the fag end of the policy, in July 2018, that the maturity amount mentioned in the document is a clerical error. The amount he was eligible to, in fact, was a mere Rs 14.92 lakh.

Subramanian had paid a premium of Rs 31.77 lakh over the eight years for the policy covering risks. Not to give up, Subramanian approached the court. The insurer claimed the Rs 66.5 lakh was a ‘death benefit sum’ assured. The maturity amount was just Rs 14.92 lakh. It was due to the alignment issues with the printer that the numbers got mixed up.

The court observed that the case was “peculiar” and that both parties had failed to exercise diligence.

The court also observed that the LIC has sought correction in the value of the maturity amount only after eight long years. By this time the petitioner had made periodical payments of premium of Rs 31,153 per month aggregating to a substantial sum of Rs 31.77 lakh without even raising any query about the blanks in some of the columns in the Policy Schedule.

The court observed that “LIC had received the unintended monetary advantage at the cost of divesting Subramanian of the use of his legitimate money during that period.” Hence, to compensate him, the court directed LIC to repay Rs 31.77 lakh that Subramanian had paid as installments over last eight years and also an annual interest of 7.5 per cent.