Summary: The Madras High Court ruled against the Life Insurance Corporation (LIC) of India, ordering them to pay back the money policyholders paid for their insurance because there were mistakes in the policy documents.
On November 24, 2025, Judge M. Dhandapani of the Madras High Court made a decision involving the Life Insurance Corporation (LIC) of India and the Insurance Ombudsman. The case was about the Jeevan Saral policy, where people who bought the policy said they were not told about the benefits they would get when the policy ended.
The Jeevan Saral policy was supposed to give money to the family if the policyholder died and also provide a certain amount when the policy ended. However, many policyholders found that the amount they were supposed to get at the end was less than what they had paid. They complained to the Insurance Ombudsman, which led to the case going to court.
Judge Dhandapani noted several important points:
Missing Information: The amount to be received at the end of the policy was not mentioned in the policy papers, which was a big mistake.
Policyholder Confusion: Many policyholders did not know what benefits they would actually get because LIC did not give complete information.
Mistake in Agreement: The court found that both LIC and the policyholders misunderstood the terms, making the agreement invalid.
"The lack of clarity in the policy documents led to a misunderstanding of the benefits by the policyholders."
The court ordered LIC to pay back the money policyholders had paid, along with interest. The judgment stressed that not being clear about the policy terms was a major problem.
The decision highlighted the need for clear communication and documentation in insurance policies. LIC was directed to make sure that policy terms are clear and easily understood by customers.
The court decided that because the policy documents were not clear, LIC has to pay back the money that policyholders paid for their insurance, along with interest.
