DISTRICT CONSUMER DISPUTES REDRESSAL FORUM PALAKKAD
Dated this the 16th day of February 2017
Present : Smt.Shiny.P.R. President
: Smt.Suma.K.P. Member Date of filing: 16/08/2017
: Sri.V.P.Anantha Narayanan, Member
(C.C.No.125/2016)
Manoharan.K.P.
S/o.Sreedharan,
Pournami,
Suryanagar,
Kanjikkode – 678 621
Residing at
Madhavam,
Thottinmedu,
Chadayankalai,
Kanjikkode (W) – 678 623 - Complainant
(By Party in Person)
V/s
Branch Manager
LIC of India,
Branch No.11,
Shoba TSM Complex,
Palakkad – 1 - Opposite party
(By Adv.T.P.George)
O R D E R
By Smt.Shiny.P.R. President.
Brief facts of complaint.
Complainant had taken 15 life insurance policies from the opposite party for Rs 50,000/- sum assured each. He had paid Rs.1,37,690/- for 3 ½ years as premium. Due to the financial stringencies he had decided to surrender the policies the opposite party offered Rs.61,249/- to the complainant. Complainant submitted that agent had given an exaggerated version regarding the benefits of the policy and he has not disclosed anything about the loss in case of surrendering the policy. Complainant further submits that if he had deposited the said amount in bank he would have got better benefit. Complainant alleged that illegal deduction from the premium collected by the opposite party amounts to deficiency in service on their part. Hence the complaint. Complainant prays for an order directing opposite party to modify the rules of LIC regarding the calculation of surrender value and to pay Rs.2,64,210/- to the complainant.
Opposite party filed version contending the following:
It is admitted that the complainant had taken 15 life insurance policies under Table 14 (Endowment plan) for Rs.50,000/- sum assured each, with date of commencement as 28/7/2012 and for terms varying from 16 to 30 years. The date of maturity of the first policy will be 28/07/2028 and that of the last policy will be 28/07/2042. On maturity of the policies, the life assured is entitled to get not only the sum assured but also accrued bonus subject to policy conditions. Clause 7 on page 2 of the policy bond clearly specifies the amount payable in case of surrendering the policy. As per clause 7, the policy can be surrendered for cash after the premiums have been paid for at least 3 years. The minimum surrender value allowable under the policy is equal to 30% of the total amount of the within mentioned premiums paid excluding the premiums for the first year and all extra premiums and additional premiums for accident benefit that may have been paid. If the complainant was not agreeable to the policy conditions, he could have very well asked for cancellation of policy within the statutory period of 15 days from receiving the policy document as stipulated under IRDA (Protection of Policy Holder’s interests) Regulations 2002. By not doing so it is clear that the complainant had accepted the terms and conditions of the policy and hence is stopped from questioning the same now. In this case only three and a half years premiums have been paid and the surrender value has been calculated based on policy conditions which are correct. The complainant is eligible to receive only the surrender value and not refund of premiums as prayed.
Opposite party further contended that insurance is a contract whereby the policyholder agrees to remit premium for the full term and if the premium is paid, the insurance company will settle the sum assured and vested bonus as on date of maturity or if the policy holder dies before the date of maturity full sum assured plus vested bonus as on the date of death is settled to the nominee. Insurance benefits are worked out based on the provisions in Insurance Act, 1938 and Actuarial Calculations approved by Insurance Regulatory Development Authority of India. If during this period had the risk contingency arisen, the opposite party would have had to pay the full amount due under the policies even though only some fraction of the premium would have been realized by that time.
It is submitted that life insurance policies cannot be equated with other types of investments where no risk is covered. The contentions in the complaint comparing returns from banks and other financial institutions with life insurance policies are without any merits. The prayer of the complainant to modify the rules of LIC regarding calculation of surrender value and allow him Rs.2,62,210 calculated by him based on his own whims and fancies is beyond the jurisdiction of this Hon’ble Forum. To challenge the legality of the policy terms and conditions the complainant has to approach a civil court.
There is no deficiency of service on the part of this opposite party as well. The opposite party is ready to settle the eligible surrender value to the complainant on submission of requirement by him.
Both parties filed their respective chief affidavits. Ext.A1 to A4 were marked from the side of the complainant. Ext.A3 and Ext.A4 were marked with objection. Exts.B1 to B17 were marked from the side of the opposite party.
The following issues are considered
1.Whether there is deficiency in service on the part of opposite parties?
2.If so, what is the relief?
Issue 1& 2.
Heard. We have perused the documents filed before the forum. Opposite party admitted the policy. It is an admitted fact that as per policy condition 7 of Ext.A1 series and Ext B2 to B16 complainant can surrender the policy for cash after the premiums have been paid for at least 3 years. Perusal of policy terms and conditions it is revealed that the minimum surrender value allowable under the policy is equal to 30% of the total amount of the premiums paid excluding the premiums for the first year and all the extra premiums and premiums for accident benefit/term riders that may have been paid. The cash value of the existing vested Bonus additions will also be allowed. As the complainant has paid premiums for a period of 3 and ½ years he is eligible to surrender the policy. On the perusal of Condition 7 of Ext A1 series documents and Ext.B17 we are of the view that complainant is entitled to get an amount of Rs.63,144/- from the opposite party.
The complainant is an educated person and he is expected to be aware of the contract he is entering into. On verifying the Ext.B1 proposal form it is seen that complainant had signed the proposal form at the time of taking the policy. Complainant should have to understand the significance of the proposed contract thoroughly before entering in to the contract with the opposite party. Both parties are binding upon the terms and conditions of the contract. Complainant cannot deviate from the terms and conditions of the contract by merely saying that agent had given an exaggerated version regarding the benefits of the policy and he has not disclosed anything about the loss in case of surrendering of the policy. The Hon’ble National Commission held in National Insurance Co.Ltd Vs Aparna Kahar that Insurance claim can only be allowed within terms and conditions of policy (2014 NCJ 850(NC). In Ind Swift Ltd Vs New India Assurance Co.Ltd Hon’ble National Commission held that it is to be construed strictly as per policy terms and conditions which are binding contract between parties and nothing can be added or subtracted by giving different meaning to words mentioned therein (2012 CPJ IV NC148). Hence we cannot attribute deficiency in service on the part of opposite party. Complainant can approach opposite party with the documents required by them to get the surrender value as per clause 7 of the terms and conditions of the policy. Since the opposite party act upon the terms and conditions of the policy we cannot attribute deficiency in service on their part.
In the above circumstances complaint is partly allowed. We direct opposite party to pay surrender value as per clause 7 of the terms and conditions of the policy. No order as to cost.
Pronounced in the open court on this the 16th day of February 2017.
Sd/-
Shiny.P.R.
President
Sd/-
Suma.K.P.
Member
Sd/-
V.P.Anantha Narayanan
Member
Appendix
Exhibits marked on the side of complainant
Ext.A1 series – 14 Nos. Original of Insurance bond polices
Ext.A2 series – Letter dated 28/7/16 & 11/05/16 issued by opposite party to the
complainant
Ext.A3 – Photocopy of Reply to version filed by opposite party (subject to proof)
Ext.A4 – Photocopy of complaint No.CC/125/16 (subject to proof)
Exhibits marked on the side of Opposite parties
Ext.B1 – Attested copy of Proposal Form for 15 policies
Ext.B2 – Attested copy of Policy Bon - 788628967
Ext.B3 – Attested copy of Policy Bon - 788628968
Ext.B4 – Attested copy of Policy Bon - 788628969
Ext.B5 – Attested copy of Policy Bon - 788628970
Ext.B6 – Attested copy of Policy Bon - 788628971
Ext.B7 – Attested copy of Policy Bon - 788628972
Ext.B8 – Attested copy of Policy Bon - 788628973
Ext.B9 – Attested copy of Policy Bon - 788628974
Ext.B10 – Attested copy of Policy Bon - 788628975
Ext.B11 – Attested copy of Policy Bon – 788628976
Ext.B12 – Attested copy of Policy Bon - 788628977
Ext.B13 – Attested copy of Policy Bon - 788628978
Ext.B14 – Attested copy of Policy Bon - 788628979
Ext.B15 – Attested copy of Policy Bon - 788628980
Ext.B16 – Attested copy of Policy Bon - 788628981
Ext.B17 – Photocopy of Surrender value calculation sheet dated 14/12/2016
Cost
No cost allowed
