Moneylife Foundation has filed a public interest litigation (PIL) in the Supreme Court against LIC. Moneylife alleges that the insurer has duped 5 crore policyholders under its plan Jeevan Saral 165. Sold as a retirement planning option, many senior citizens lost a significant amount of their premium invested in the policy, alleged the foundation.
Through the PIL, Moneylife seeks return of premium amount with an interest of 8% for all existing investors of Jeevan Saral Plan 165.
Senior counsel Arvind Datar is representing the NGO. The matter is scheduled for hearing on July 15.
Experts say that Jeevan Saral is an endowment plan but with a different flavour. Most endowment policies come with pre-defined maturity benefits on death and survival of policyholders. However, Jeeval Saral has a pre-defined death benefit but maturity amount differs depending on the fund value. For instance, if a 50-year-old pays a premium of Rs.25,000 per year, his nominee would get sum assured of Rs.5 lakh on his death within 10 years. However, if he survives the policy term, he would get the fund value, which is likely to be much lower than sum assured due to high mortality charges and fixed income investments, say experts.
Earlier, the foundation had sent a memorandum to IRDAI on August 18, 2018. However, as it did not receive satisfactory response from the insurance regular, it filed a PIL with the Supreme Court on March 25, 2019.
