Savings and investment plans are illegal as life insurance is a business to compensate the nominees in the event of demise of the policyholder and not on survival.
Gujarat high court, couple of days ago, demanded explanation from the Centre, IRDA and 19 insurance companies, including the Life Insurance Corporation (LIC) of India, over a PIL suspecting the legality of life insurance products offered by the companies.
Petitioner Kailash Maheshwari, a city-based chartered accountant, has asked for action against insurance companies for fooling customers and for criminal conspiracy and to try them under provisions of Prize Chits and Money Circulation Scheme (Banning) Act as well as under anti-corruption laws.
The petitioner has urged that the notification allowing the levy of service tax on the savings part of the premium be taken down and that service tax be allowed only on the risk premium part. The PIL also asked for stay on collection of savings as well as investments by the life insurance companies and to make endowment plans as illegal, and refund the premium.
As per Maheshwari, Savings and investment plans are illegal as life insurance is a business to compensate the nominees in the event of demise of the policyholder and not on survival.
The petition says that according to the law, life insurance business is only meant to be a business to pay an amount to the beneficiaries in case of death of the policyholder. Payment on survival is not the offering of life insurance. Therefore, all the savings as well as investment plans are illegal as the insurance companies do not have the rights to gather savings or investments.
- Most Read
- How to Revive Lapsed LIC Insurance Policy Online
Date: 15 September 2017
- How to Save Premium Cost on your Life Insurance Purchase
Date: 13 September 2017
- Why Renewal of the Term Insurance Policy is Important?
Date: 11 September 2017
- LIC Senior Citizen Pension Scheme 2017
Date: 30 August 2017
- 5 Questions You Must Seek Answers for Before Buying Life Insurance Policies
Date: 18 July 2017
- Best 5 LIC Policies To Invest in 2017
Views : 1020436
- LIC Policy Status: Check LIC Policy Details and Statement Online
Views : 988989
- Best Term Insurance Plans in India with Claim Settlement Ratio
Views : 385010
- A Quick Guide To Post Office Monthly Income Scheme
Views : 380936
- National Pension Scheme (NPS) – Govt Approved Pension Scheme
Views : 253682