Money Back Policy Amount not returned/Adjusted against Loan Balanced Outstanding by LIC Housing Finance

POSTED BY Arvind Banta ON December 12, 2012 4:34 pm COMMENTS (2)

I had taken a home loan from LICHF almost 15 years ago.At that time LICHF often asked for pledging some insurance policies as collateral for the  home loan.Among other policies,I had pledged a money back policy where the payout was around Rs 30000 every five years.


Since the policy was pledged with LICHF two instalments of Rs 30000 each was paid by my insurer to LICHF in the year 2000 & in 2005.


LICHF  was required to reduce my home loan balance outstanding by Rs 60000 at the time the funds were recieved.But LIC Hosuing Finance has done nothing till date,inspite of several written  reminders over the last 6-8 years.While they have convenienetly appropriated the Rs 60000 and not reduced my Balance outsatnding,with the result that Rs 30000 is due for adjustment from the year 2000 and Rs 30000 from the year 2005.


My loan term is for 20 years,but I wish to foreclose the laon and have not been able to do so because of this pending issue


Is there anything I can do to claim this amount with penal interest.


On one ocassion when I had  missed EMIs for 2-3 months(paid later) LICHF recovered almost 18% penal interest with recovery charges for the delayed payments.


I had also  written a complaint recently to the National Housing Bank,but got no response from there either.

Please advise,what I can do to address this matter



2 replies on this article “Money Back Policy Amount not returned/Adjusted against Loan Balanced Outstanding by LIC Housing Finance”

  1. Credexpert says:

    Dear Mr. Banta,

    As you have already made written complaints to LIC HFL over the past 6-8 years, we would advise you to make a personal visit to the branch with a copy of your complaints and other communications received from LIC HFL. Presenting your case with all the documents personally will help expedite the process.


  2. TheZionView says:

    First thing is write them clearly in a email or official complaint.Then wait for 30 days.(hope its been done already)

    Then raise the issue with regional or divisional head office of LIC. Then even after that there is no response or solution take it up with NBFC consumer complaint.

    This should mostly resolve the issue.If not the next step will be take them to consumer court.Dont be afraid take help of lawyer whos compensation also can be obtained from LIC if you win the case.

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