The National Consumer Commission has pulled up Life Insurance Corporation of India for failing to protect the interest of the insured by not clearly explaining the clauses of the policy, making the holder more prone to risk.
The commission said its agents are more interested in making a quick buck by getting more policies for the company and they show scant regard to the interest of the policy holder.
"To make a quick buck, the (insurance) agents try to collect as much premium. They show scant regard to protect the interest of the consumers," the commission comprising members R K Batta and P D Shenoy said while dismissing a plea of LIC.
The apex consumer body passed the direction while upholding Delhi commission's order to pay compensation to the father of the insured whose claim was refuted due to negligence on the part of an LIC agent in not explaining the terms of the insurance policy.
Sunil Jain purchased a policy in 2002 for his daughter Mona Jain who died in 2005 before the commencement of the policy, which was not explained to him by the agent at the time of its issuance that resulted in its cancellation.
"It was incumbent on the part of LIC or its agents to have explained all the clauses of the policy to the consumer before collecting the premium and issue of the cover note," the commission said.
It noted that the insurance policy was issued with a cover note to the policy holder, Baby Mona Jain, by the LIC agent without explaining its terms and conditions.
"No record has been placed before us to show that the agent, while issuing the cover note, had provided this material information to the prospect to enable him to decide on the best cover that would be in his or her interest," the commission said.
