Order-20.
Date-15/05/2015.
Complainant Rohit Show by filing this complaint has submitted that the father of the complainant purchased one policy being No. 45696156 and father of the complainant being the proposer of the said policy and it was purchased with a hope to secure the complainant’s future prospect and also hopped that the said policy would be a best amount in feature after majority and maturity of the complainants age as well as the said policy of the complainant and when after payment of premium in favour of the op, complainant proposed before the op for surrender of the policy after lapse of few months. Complainant and the proposer came to know that op nos. 2 and 4 misguided the father of the complainant and after surrendering the said policy by the proposer, the amount of RS. 68,727/- was disbursed which is completely against the terms and conditions of the policy and practically hope of the complainant to complete the engineering studies is completely unfinished. When the complainant and the proposer visited op no.2 regarding surrender value of the said policy. Op no.2 stated that proposer after proper calculation, the total amount of surrender value is Rs. 1,14,701/-. But actually it was not paid but only Rs. 68,727/- was paid. But op did not pay any heed. Fact remains that the insured must also informed about the terms and condition of the policy and must strictly confirm to the statement in the prospectus or policy bond and the insurer has heavy duty in practice to illustrate before the proposer and the insurer has heavy duty in practice to illustrate before the proposer or insured person but it is very unfortunate for the complainant and the proposer that neither the agent nor the ops did not explain properly regarding the policy clauses. In fact complainant did not get the actual amount what he has paid as premium. Though complainant satisfactorily delivered all the terms and conditions as in the policy and accordingly paid Rs. 16,628/- yearly before the LIC, totaling of Rs. 1,33,024/- whereas sum assured is Rs. 1,00,000/-.
But after the date of commencement of Risk started on 28.12.2003 and complainant is entitled to get the entire benefits related to the said policy and the last installment has been paid by the proposer on 17.02.2011 and proposer that is father of the complainant paid totaling of Rs. 1,33,024/- to the LICI for eight years. So complainant is entitled to entire amount of Rs. 1,14,701/-. But op has paid Rs. 68,727/- but in reality complainant paid Rs. 1,33,024/- and so total amount would be Rs. 1,40,000/- after surrender the policy and facing such loss, complainant reported the matter to the Insurance Co. But Insurance Co. did not take any step for which the present complaint is filed directing the op to pay Rs. 1,40,000/- and further harassment, compensation etc.
On the other hand op by filing written statement submitted that policy No. 415696156 was taken by the father Sri Suraj Narayan Show of complainant on the life of his son Rohit Show the complainant in this case and basic sum assured of the policy was Rs. 1 lakh with the date of commencement of the risk on 28.12.2005 with policy term 16 years and the premium paying term for 8 years and the policy vested on the life of the complainant on 28.12.2011 and immediately after vesting of the policy, first survival benefit of Rs. 20,000/- i.e. 20 percent of the basis sun assured was paid to the complainant on 28.12.2011 and subsequently the second survival benefit of Rs. 20,000/- was paid again to the complainant after two years as per the terms and conditions of the policy. But after few days, the policy holder visited the branch office of the op and approached for loan under the policy. But the complainant was informed that as per policy condition loan was not available under the policy after the date of vesting. Then complainant applied for surrender of the policy for meeting urgent financial need.
The amount of surrender value as available under the policy was Rs. 68,727/- as on 07.06.2014 which was duly apprised to the complainant and in agreement he applied for it and accordingly to the request of the complainant, the surrender value of the policy amounting to Rs. 68,727/- was paid to the complainant on 07.06.2014 after deducting two survival benefits at the rate Rs. 20,000/- each i.e. Rs. 40,000/- and in fact complainant himself is the party that after seeing the calculation of surrender value of Rs. 1,14,701/-, complainant surrendered the policy in question. But fact remains that surrender value quotation generated from module is a broad guidelines for departmental use only and is subject to corrections after manual checking before final settlement and such quotation is never being given to any policy holder. So, such quotation should not be considered suo moto as being full and final unless rectified by the concerned department of the branch office.
It appears from the surrender value quotation that the paid up value being Rs. 1 lakh has to be paid in four installments at the intervals of two years after the attainment of majority of the complainants i.e. two installments at the rate Rs. 20,000/- and another two installments at the rate Rs. 30,000/- and vested bonus addition will be paid on the attainment of 26 years of the complainant.
But as per policy contract this amount is to be paid at the time of happening of any contingencies like death or maturity i.e. in the year 28.12.2019 subject to deduction all the survival benefits paid earlier. But surrender of the policy is considered as breach of contract and the surrender value is the present value of the future mature proceeds and therefore discontinued factors are applied on maturity proceeds depending on the unexpired duration of the policy and it may be mentioned here that this discounting factor is going on increasing with the reduction of the unexpired term and in this case this factors is 0.62850 which is based on actuarial calculation.
In fact by multiplying the surrender value of factor of 0.62850 with the amount of Rs. 1,82,500/- which comes to Rs. 1,14,701/- and this amount is further reduced to the extent of two installments of survival benefit payments at the rate Rs. 20,000/- each together with 10.5 percent interest compounding half-yearly. But the complainant did not disclose anything in his complaint about the receipt of Rs. 40,000/- towards survival benefits to mislead the Forum as well as to get unlawful monetary gain. The copy of the status report confirming the payment of two installments of Rs. 20,000/- each to the complainant is annexed to support that any.
The actual calculation of the surrender value of the complainant is Rs. 1,14,701/- (as shown in the quotation) – (Rs. 20,000/- + interest of Rs. 5,495.84 paisa) i.e. Rs. 25,435.84 paisa and further Rs. 20,000/- + interest Rs. 538.34 paisa i.e. Rs. 20,538.34 paisa was deducted out of Rs. 1,14,701/- and accordingly surrender value became Rs. 68,728.82 paisa and that was disbursed to the complainant and complainant received it.
So, in view of the fact that the entire complaint is not maintainable and it is misconception one for which the complaint should be dismissed.
Decision with reasons
On proper consideration of the complaint and written version and also considering the Kamal Jeevan Policy, it is clear that date of commencement of the year of risk 28.12.2005 on its actual maturity date 28.12.2009 and that plan was issued in the name of Rohit Show minor and he did not get the maturity on 28.12.2011 and thereafter complainant was paid two month back of Rs. 20,000/- each and fact remains that on the date of maturity if complainant prayed for disbursement of the full amount, in that case, complainant shall have to get Rs. 1,82,500/- and that date is 28.12.2009.
But most interesting factor is that complainant after getting money back surrendered the policy in the year 2014 after taking two money back of Rs. 20,000/- on 30.12.2011 and 02.04.2014. So, accordingly the calculation was made as per policy terms and regulations and considering the status report of the policy of the complainant, it is clear that complainant is entitled to get Rs. 68,727/-. But in the quotation, it is noted Rs. 1,14,701/-. But after calculation of Rs. 40,000/- added with Rs. 68,727/- it is found that complainant has already paid Rs. 1,08,727/-.
Ld. Lawyer for the complainant submitted that in the quotation, it is noted Rs. 1,14,701/-. So, balance amount of Rs. 5,974/- has not been paid and practically that is claim of the complainant in this case. So, we have entering into the above aspect whether surrender value quotation as maintained by the op in the final form or not. In this regard we have gone through the surrender value quotation we find that quotation is for departmental use only and it is also noted to check the quotation for the accuracy of the basic data and deduct back premium before making final payment and in the said quotation, the history of premium transaction are noted for five years, nothing more and in fact in the said quotation it is not noted how much amount has been paid in the meantime that is deduction of Rs. 40,000/- is not there. Deduction of interest is also not mentioned there for premature surrender.
But after considering the special surrender value before risk commencement date after premium had been paid fully, the basic calculation of present surrender value is found properly calculated with half yearly factor with risk on accumulated at the rate percent per half-year and after considering that calculation as made along with surrender status report of policy after surrender we have gathered that the calculation as made by the op is quite correct and as per norms as laid down in the order of the LIC authority.
Further considering the surrender value Table No. 1A effect from 01.07.1950 it is found that calculation was quite okay and in fact complainant was paid Rs. 1,08,727/- that means Rs. 40,000/- has been paid previously and thereafter balance of Rs. 68,727/- was paid. So, apparently in respect of calculation, there is no error and payment calculation premature of surrender of policy and the amount as disbursed is correct in nature. But it has become a practice to follow up some internal paper of the LIC Department regarding calculation or quotation etc. by the customers which is completely uncalled for.
Moreover this survival quotation slip in Xerox form which is submitted by the complainant or by the op, it is not anyway given any right to the complainant to get any relief because several other factors shall be considered and another factor is that in the said survival quotation deduction of Rs. 40,000/- is not there. For pre-mature surrender with interest as would be that has not been mentioned there.
So, we are convinced to hold that with some explanation, complainant appeared before this Forum. But we are convinced that the entire matter was done by the complainant for withdrawing the money bye-passing his father when he became major. Thereafter the father insisted him to file this complaint. But negligence and deficient service on the part of the op is not at all proved.
On the contrary it is proved that the complainant with such intention to get money at a time served it and subsequently he realized that he made a gross mistake when his father showed that if it would be matured in the 2019 in that case, complainant would be benefited when complainant appeared making some false allegations against the ops.
In the light of above observation we are convinced to hols that this complaint bears no merit in the eye of law and ops have their no negligent or deficient manner of service. Op has not deceived the complainant by any means but as per wish of the complainant, complainant prayed for surrender of policy after lapse of 8 years and before maturity day of the year 2009 and that surrender was made in the year 2014. So, the calculation made by the op is quite correct for which the present complaint fails.
Hence, it is
ORDERED
That the complaint be and the same is dismissed on contest against the op but without any cost.
