DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

BATHINDA (PUNJAB)

CC No. 344 of 29-07-2010

Decided on : 21-12-2010

Neha Wd/o Sh. Sumeer Kumar R/o H. No. 197-A, Gali Kamal Cinema Wali, Bathinda.

.... Complainant

Versus

1. Bajaj Allianz Life Insurance Co. Ltd., Near D.A.V. College, Bibiwala Road, Bathinda, through its Branch Manager

2. Bajaj Allianz Life Insurance Co. Ltd., 4^th Floor, Sanghai Tower, Feroze Gandhi Market, Ludhiana, through its Divisional Manager

   .... Opposite parties

Complaint under Section 12 of the Consumer Protection

Act, 1986.

 

QUORUM

Ms. Vikramjit Kaur Soni, President

Dr. Phulinder Preet, Member

Sh. Amarjeet Paul, Member

For the Complainant : Sh. Ravi Kant Bhardwaj, counsel for the complainant.

For the Opposite parties : Sh. M.L. Bansal, counsel for the opposite parties.

O R D E R

VIKRAMJIT KAUR SONI, PRESIDENT

1. The complainant has filed this complaint under Section 12 of the Consumer Protection Act, 1986, as amended upto date (Here-in-after referred to as 'Act'). The complainant and her husband on the allurement of opposite party No. 1 purchased the Life Insurance Policy in the name of their minor daughter Naina aged 4-1/2 years. As per allurement, terms and conditions of the policy, the complainant and her husband would be required to deposit premium of Rs. 20,000/- per annum for a term of 20 years and at the end of the policy, the policy holder would be entitled to the fund value besides the insurance claim of Rs. 2.00 Lacs. The opposite parties further allured the complainant and her husband that in case of death of the policy holder i.e. husband of the complainant, the amount of premium amount would not be required to be paid by the life assured Naina and she would be entitled to all benefits of the insurance policy i.e. Rs. 2.00 Lacs being the insurance claim, fund value of the insurance policy, after completion of terms of the policy and also additional amount for helping the life assured. The officials of the opposite parties got deposited Rs. 20,000/- from the complainant and also obtained her signatures on some papers. Thereafter, the opposite parties issued Insurance policy No. 0064322328 dated 5.9.07 to the policy holder, i.e. husband of the complainant having product code 75, policy term 20 years, date of commencement of the policy and risk 5.9.2007 and having maturity date 5.9.2027. The complainant is the nominee to the said policy. The husband of the complainant Sumeer Kumar, expired on 5-6-2009. After the death of Sumeer Kumar, the complainant is not required to deposit the premium as per terms of policy disclosed to the complainant and her husband by opposite party No. 1and the daughter of the complainant was also entitled to insurance claim of Rs. 2.00 Lacs besides other benefits. The complainant lodged the claim with the opposite parties and also furnished the requisite documents relating to insurance claim of Rs. 2.00 Lacs and other benefits on account of death of the policy holder, as per assurance given by opposite party No.1. The opposite parties have refused to pay any amount to the complainant or her daughter and proclaimed that the complainant should continue paying the amount of premium in order to get the fund value at the time of maturity of the policy otherwise the amount already deposited by the husband of the complainant would stand forfeited. Hence, this complaint seeking direction of this Forum to the opposite parties to pay the Insurance claim of Rs. 2.00 Lacs and other benefits on account of death of Sumeer Kumar, fund value of the policy, without payment of any premium amount besides Rs. 50,000/- as compensation and cost.

2. The opposite parties filed their written reply by taking legal objection that complainant is not consumer and pleaded that grievances of the complainant is not in accordance with the terms and conditions of the policy. The death of the policy holder was neither intimated to the opposite parties nor any papers were submitted for processing the death claim as per the terms and conditions of the policy. As per proposal form for insurance the proposed insured was Naina the minor daughter of the deceased policy holder Sumeer Kumar. No waiver of premium benefit was opted in the proposal form by the deceased policy holder. The policy documents which included the terms and conditions of the policy as well as a copy of the proposal form was made available to the deceased policy holder. The policy holder was entitled to review the terms and conditions of the policy and in case the policy holder was not satisfied with the terms and conditions of the policy, he was entitled to review the policy within 15 days of the date of receipt of the policy documents. No such option was exercised by the deceased policy holder which clearly indicated that the policy holder was satisfied with the policy as issued. The policy holder had paid the renewal premium for policy No. 0064322328 on 3-09-2008. As per the terms and conditions of the policy of insurance, since the deceased is not the life assured under the policy of insurance, no benefits are payable upon death of the policy holder. The policy holder has not opted for waiver of premium benefit, so regular premium is payable as per the terms and conditions of the policy. Had the policy holder opted for waiver of premium benefit, which is an additional benefit and not inbuilt in the terms and conditions of the policy, there would have been no necessity for making payment of further premium in case of death of the policy holder. The complainant has also failed to deposit the 3^rd premium and the policy has lapsed as per condition No. 5(b) according to which in the event of failure to make payment of full regular premium falling due during the first three policy year and non-payment of complete amount due even with the grace period, the policy would be automatically and immediately lapsed for the insurance cover including the cover under all riders.

3. Parties have led evidence in support of their pleadings.

4. Arguments heard and written submissions submitted by the parties perused.

5. The husband of the complainant purchased Insurance policy in the name of their minor daughter namely Naina. The opposite parties issued Insurance policy No. 0064322328 dated 5.9.2007 to the policy holder, husband of the complainant, having product code 75, policy term 20 years, date of commencement of the policy was 5.9.2007 and having maturity date 5.9.2027. The husband of the complainant paid two installments of premium and expired on 5.6.2009. The learned counsel for the complainant submitted that at the time of purchase of the policy, the complainant and her husband were allured by opposite party No. 1 that in case of death of policy holder i.e. husband of the complainant, the amount of premium would be waived off and the insurance claim and fund value would be paid to the complainant being nominee to the said policy. When the complainant/claimant filed claim with the opposite parties, her claim was repudiated on the ground that as the policy is in the name of their minor daughter Naina who is 4-1/2 years old, as per the terms of the policy, the sum assured is only paid in case of death of life assured and also refused to waive off the premium on the ground that no such waiver scheme was opted by the husband of the complainant and thus she is not entitled for any benefit. The learned counsel for the opposite parties submitted that the regular premium is payable as per terms and conditions of the policy. Waiver of premium benefit is an additional benefit and not inbuilt in the terms and conditions of the policy. Moreover, the complainant has failed to deposit the 3^rd due premium and accordingly the policy in question has lapsed.

6. A perusal of Proposal Form for Life Insurance Ex. R-2 shows that product name is Capital Unit Gain and no rider has been mentioned in this policy. Neha is the nominee to the said policy. The claim of the complainant has been repudiated by the opposite parties as per terms and conditions Annexure H.2 under the title “In this policy, the investment risk in the investment portfolio is borne by the policy holder” under clause 5(b). The said clause 5(b) is reproduced hereunder :-

   “5. Non payment of Regular Premium and Forfeiture

   b) If the unpaid Regular Premium was due during the first three policy years, and the policy holder has failed to make the payment before the expiry of the aforesaid grace period :

   i) The policy shall immediately lapse alongwith all insurance covers

   ii) The policy holder may revive the policy within a revival period of two years from the due date of first unpaid Regular Premium subject always to Section 5(d) below, failing which the contract shall be terminated and 100% of the value of Accumulation Units in respect of Regular Premiums as on date of lapse, and the Top Up Premium Fund Value, if any shall be paid at the end of the third Policy Year or at the expiry of the revival period, whichever is later.

   iii) if policy is lapsed and the death of the Life Assured happens, the existing Fund Value would be paid and the policy will terminate immediately.”

7. In the case in hand, the two main contentions of the complainant are that :-

   i) She is entitled to get the maturity amount of the policy to the tune of Rs. 2.00 Lacs, fund value and any other benefit

   ii) As the father of the life assured had died before paying the third premium, the premium would be waived off.

   The due date of the third premium/installment was on September, 2009. The husband of the complainant died on 5-6-2009 i.e. three months prior to the deposit of the premium. As per Ex. R-3 the allocation rate was 95% during 6^th September, 2007 and 8^th September, 2008. The net investments were of Rs. 19,000/- in the year 2007 and Rs. 19,000/- in the year 2008. The life assured under this policy is the minor daughter aged 4-1/2 years of the deceased. The deceased is not the life assured. In case of his death, the complainant is not entitled to get the sum assured as the life assured is their minor daughter. The second contention of the complainant that the premium in future be waived off in case of the death of life assured. A perusal of proposal form shows that column of the rider is not filled with anything. This shows that the complainant has not opted for any rider. When the husband of the complainant has not given any option for rider, in such circumstances, the premium cannot be waived off. The policy has lapsed due to the non-payment of the third premium. The complainant is entitled for fund value only. She cannot claim any other benefit as the policy has lapsed. As per the terms and conditions of the policy, she can revive the policy within two years after the grace period after the date of last paid premium. A perusal of the terms and conditions Ex. R-4 shows that these are not signed by any of the parties. In such circumstances, the support can be taken from IRDA rules which are applicable on all the Insurance policies. Regulation No. 8 i.e. Surrender Charges of Insurance Regulatory and Development Authority (Standardization of terms and conditions of ULIP Products and treatment of lapsed policies)Regulations, 2010, is reproduced hereunder :-

   “It is observed that insurers apply different surrender charges while paying the surrender value to the Insured. After due consideration of various practices, the Authority orders that the surrender charges (as percentage of fund value ) shall not exceed the limits specified below :-

   Year Policy period

   Less than 10 years More than 10 years

   ------------- ----------------------- -----------------------

   Ist year 12.50% 15%

   2^nd year 10.00% 12.50%

   3^rd year 7.50% 10%

   4^th year 5.00% 7.50%

   5^th year 2.50% 5%

   6^th year Nil 2.50%

   7^th year & onward Nil Nil

    

8. Hence, this complaint is partly accepted with Rs.5,000/- as cost and compensation. The opposite parties are directed to pay the fund value of the net investment amount i.e. Rs. 38,000/- to the complainant after deducting 7.50% of the amount ( i.e. Rs. 38,000/- minus 2,850/- = Rs. 35,150/-) as per table shown above. The compliance of this order be made within 30 days from the date of receipt of copy of this order. In case of non-compliance of the order, the aforesaid amount of Rs. 35,150/- will yield interest @9% P.A. till realisation.

   A copy of this order be sent to the parties concerned free of cost and the file be consigned.

Pronounced

21-12-2010 (Vikramjit Kaur Soni)

President

(Dr. Phulinder Preet)

Member

(Amarjeet Paul) Member