Udaipur, December 31, 2024 – Chartered Accountant Kailash Maheshwari has alleged that life insurance policies operated by various companies in India are the biggest “illegal and fraudulent” businesses in the country, because primarily these are savings and investment plans. Maheshwari said this to the media at a press conference held in Udaipur yesterday.

Maheshwari further said it was unfortunate that even though there are around 26-27 life insurance companies operating in the country today, they have not been able to insure even 10% of the population. According to him, these companies focus primarily on selling savings or investment plans and are the biggest hindrance to the development of the country's economy. He further said that the life insurance policies sold, which include savings, never disclose how much of the premium is allocated towards savings and how much is for the actual insurance coverage.

Maheshwari accused life insurance companies of betraying the families of policyholders by not refunding the savings amount to the nominee upon the policyholder’s death. This, he alleged, is the biggest act of betrayal towards the widow and orphaned children of the policyholder. He pointed out that Life Insurance Corporation (LIC) has invested around Rs 10 lakh crore to Rs 12 lakh crore in the stock market, but, he says, it remains unclear how this has benefited the country's economy. He believes that this has only fuelled speculative trading rather than increasing production or providing employment.

The CA claimed that if these funds had been invested in manufacturing or irrigation sectors, India’s economy would have grown at a double-digit rate. He also raised concerns about the Indian government plans to allow 100% foreign investment in the insurance sector, which, he believes, could be detrimental to the nation's economy and could push India further into economic subjugation. Currently, foreign investment is permitted up to 74%, and Maheshwari warned that allowing 100% foreign investment would further drive the country towards economic slavery.

According to Maheshwari, the All India Life Insurance Policy Holders Association in Mumbai reported that until 2005, the total amount seized by LIC in relation to lapsed and surrendered policies was Rs 4,08,000 crore. He said that LIC becomes insensitive when claims are made against it.

Maheshwari cited a significant Supreme Court ruling from 1987 in the case of Peerless General Finance & Investment Company Limited (PGFI), where the Court had ruled that the seizure clauses, including those in savings schemes and life insurance policies, should be abolished. However, he lamented that these seizure clauses still exist in life insurance policies today.

Maheshwari has sent a memorandum to Rajasthan Chief Minister Bhajan Lal Sharma, providing information about Mission Great India, a project he himself has developed. The mission aims to make Rajasthan a "poverty-free, unemployment-free and inflation-free" State, he claims. As part of this initiative, Maheshwari has outlined a plan to provide life insurance coverage of up to Rs 20 lakh completely free, without requiring any premium payments. He has also proposed a pension plan for the elderly of up to Rs 5 lakh annually, again without any contribution, and a provision of loans up to Rs 2 lakh without any security. These benefits, Maheshwari stated, would be available based on the purchase of goods and services by customers. Maheshwari believes that by joining this scheme, families will be lifted above the poverty line, thus contributing towards making Rajasthan a poverty-free State.

Under this plan, Maheshwari said they would offer a 20% to 100% cash-back on the purchase of goods and services by customers, which, he claimed, would provide relief from inflation. He explained that the implementation of this scheme across the State would create job opportunities or self-employment for at least 2,00,000 to 5,00,000 youths, thereby contributing to making Rajasthan an unemployment-free State.

To facilitate this, Maheshwari's company plans to establish a Customer Welfare Fund, which will be managed by a committee. This committee will consist of three company members and two members nominated by customers. Maheshwari has requested the Rajasthan government to nominate its representative to the management committee to help ensure the protection of customer interests.