Man sold ‘insurance policy’ instead of FD from wife’s cancer fund, wins Rs 1.5 lakh

“Converting ‘single premium FD’ to ‘regular premium policy’ by concealing facts is unfair trade practice. The complainant is a senior citizen of 62 years, and his wife is a cancer patient, and money is saved for his wife’s cancer treatment,” the July 17 order read.

Promised fixed deposit, received insurance policies

The complainant stated that he had little knowledge of computers and information technology. In December 2019, two authorised agents of the insurance company allegedly approached him and offered what they described as a “single premium fixed deposit” carrying a high rate of interest.

Believing the words, the man added that he gave Rs 35,000 to the employee of the insurance company as a fixed deposit. However, he claimed that instead of making this amount a fixed deposit, the employee had taken it as the first installment premium of an insurance policy in his name.

A month later, the agents again persuaded him to invest Rs 1.10 lakh, assuring him that the amount would be returned with interest within a month. Instead, the money was allegedly used as the first premium for another insurance policy issued in the name of his son. The policy documents were handed over only about two months later.

The complainant further alleged that in January 2021, another Rs 1.10 lakh was debited from his bank savings account without his knowledge or consent and treated as the renewal premium for his son’s insurance policy. He maintained that he had never authorised any standing instruction permitting such deductions.

He claimed that the unauthorised deduction caused severe financial hardship because the money had been kept aside for his wife’s cancer treatment. Alleging mental agony and financial loss, he approached the commission seeking a refund and compensation. The man was represented by advocate K Sreelal in the matter.

‘No awareness of policy terms’

The commission noted that the senior citizen consistently maintained that the policy terms, renewal conditions and other material details were never explained to him. It also found that the insurance policies had allegedly been sold by representing them as “single premium fixed deposits”.

The commission further observed that the agents of the insurance company chose not to contest the complaint despite being served with notice. It held that the insurer had indulged in an unfair trade practice by concealing material facts and converting what was represented as a single-premium fixed deposit into a regular premium insurance policy.

]Observing that the conduct had caused severe financial loss and mental agony to a senior citizen, the commission directed the insurance company to refund Rs 1.10 lakh with 9 per cent interest from the date of filing of the complaint, pay Rs 30,000 as compensation and Rs 10,000 towards litigation costs.

Takeaway

This ruling highlights that misrepresenting an insurance policy as a fixed deposit and concealing its true nature amounts to an unfair trade practice.

For consumer-related grievances, individuals may contact the consumer helpline in their respective states and Union territories (Kerala: 1800-425-1550) or call the National Consumer Helpline at 1915 for assistance.