Punjab

Rupnagar

CC/22/170

Harnek Singh - Complainant(s)

Versus

Life Insurnce Company of India - Opp.Party(s)

05 May 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

RUPNAGAR

Consumer Complaint No.        :170of 29.11.2022

             Date of Decision                     :05.05.2023

 

Harnek Singh son of Sh.Soma Singh, Resident of Village Marauli Khurad, Tehsil Chamkaur Sahib, District Ropar.

                                                                                      ….Complainant

Versus

 

Life Insurance Corporation of India, Chandigarh, Branch Office Unit No.2, Jeevan Parkash 2nd Floor, PB No.28, Sector 17/B, Chandigarh PIN Code No.160017.

     …Opposite Party

Complaint under the Consumer Protection Act.

 

QUORUM:

SH.KULJIT SINGH, PRESIDENT

SH.RAMESH KUMAR GUPTA, MEMBER

SMT. RANVIR KAUR, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         In person

For OP                           :         Sh.Narinder Kumar, Advocate

 

ORDER

PER  KULJIT SINGH, PRESIDENT

 

  1. In the present complaint, the complainant has averred thathe had purchased Life Insurance Policy on 30.11.2012 vide policy No.472329757 from OP and same will be matured on 28.11.2030 and paid premium regularly.  Due to financial problem, complainant unable to continue the said premium.  Thereafter, he sent an application dated 12.10.2022 for refund the amount already deposited in the shape of premium but insurance company issued letter to him that he has approached to LIC Chandigarh for necessary query and he approached to said branch but the official of LIC Chandigarh had refused to refund the premium amount verbally.  Lastly, prayer has been made that OP be directed to refund the premium already paid by complainant alongwith interest @9% per annum.  He also claimed Rs.50,000/- as compensation and Rs.5000/- as litigation expenses.
  2. OP has appeared through counsel and contested the complaint by submitted that complainant has no locus standi; complaint is baseless; complainant has not come with clean hands and he has concealed the material facts from Commission that the premiums for at least three years under the policy No.472329757 has not been paid by complainant as per terms and conditions of the policy in question for getting the refund or surrender value of premiums deposited and policy in question has already been lapsed on 28.03.2013 together with rider benefits on account of non-payment of subsequent premiums and all premiums paid in respect of it have already been forfeited by answering OP as per terms and conditions of policy in question.  Complainant has purchased policy No.472329757 under New Bima Gold Plan (179-12-12) on 28.11.2012.  Policy in question has to be matured on 28.11.2024 and first unpaid premium under policy as per record is 03/2013.  As per terms and conditions of policy, the policy should have acquired paid up value only after full 3 years premiums must have been paid.  Hence, in this case, policy in question has already been lapsed on 28.03.2013 together with rider benefits on account of non-payment of subsequent premiums and complainant is neither eligible for refund of premiums nor for surrender value under policy as per terms and conditions of policy in question.  On merits, it is admitted that complainant had purchased said policy on 28.11.2012 and had deposited only 4 initial installments @Rs.5004/- for 4 months upto 02/2013 i.e. total amount of Rs.20,016/- were deposited and first unpaid premium under the policy as per record 03/2013.  Hence, the policy in question got lapsed without acquiring paid up value/surrender value.  As per clause 6 of the policy-forfeiture in certain events, if the premiums shall not be duly paid by the policyholder ……… all the moneys have been paid in consequence hereof shall belong to corporation excepting always insofar as relief provided in terms of the privileges herein contained or may be lawfully granted by the corporation. As per Cir. 116/4 dated 14.06.1957, policy dockets of the policies without acquiring surrender value may be destroyed after 5 years from the date of lapse.  Other averments of complaint are denied and prayed for dismissal of complaint with costs.
  3. In order to prove their respective versions, both the parties produced on the file their respective documents.
  4. We have heard learned the parties with their valuable assistance and have also gone through the record carefully.
  5. Complainant has argued that due to financial problem, complainant unable to continue the said premium.  Thereafter, he sent an application dated 12.10.2022 for refund the amount already deposited in the shape of premium but insurance company issued letter to him that he has approached to LIC Chandigarh for necessary query and he approached to said branch but the official of LIC Chandigarh had refused to refund the premium amount verbally.
  6. On the other hand, learned counsel for the OP argued that complainant had purchased said policy on 28.11.2012 and had deposited only 4 initial installments @Rs.5004/- for 4 months upto 02/2013 i.e. total amount of Rs.20,016/- were deposited and first unpaid premium under the policy as per record 03/2013.  Hence, the policy in question got lapsed without acquiring paid up value/surrender value.  Policy in question was issued to complainant after the receipt of the proposal form duly signed by him.
  7. We are of the considered opinion that on the basis of proposal form and the declaration made thereunder, the OP issued an insurance policy. Further, complainant argued that complainant wrote letter to the OP to refund his money but the OP did not pay any heed to his request.  We have seen the documents to this effect. So, the claim for the refund of the amount deposited by the complainant under the terms of the policy is unsustainable in the eyes of law.  Hence, the complainant is entitled for surrender value only.
  8. However, the complainant is held entitled to surrender value as per IRDA Regulations 2013 which came into force on 18.02.2013.  Wherein, Regulation 13, obligation of an insurer upon discontinuance of a policy before lock-in-period- finds mentioned as under:-

Where the policy is discontinued during the policy year

 

Maximum Discontinuance charges for the policies having annualized premium up to Rs.25,000/-

Maximum discontinuance charges for the policies having annualized premium above Rs.25,000/-

1.

Lower of 20% * (AP or FV/policy account value) subject to a maximum of Rs.3000/-

Lower of 6% * (AP or FV/policy account value) subject to a maximum of Rs.6000/-

2.

Lower of 15% * (AP or FV/policy account value) subject to a maximum of Rs.2000/-

Lower of 4%* (AP or FV/policy account value) subject to a maximum of Rs.5000/-

3.

Lower of 10%* (AP or FV/policy account value) subject to a maximum of Rs.1500/-

Lower of 3%* (AP or FV/policy account value) subject to a maximum of Rs.4000/-

4.

Lower of 5%* (AP or FV/policy account value) subject to a maximum of Rs.1000/-

Lower of 2%* (AP or FV/policy account value) subject to a maximum of Rs.2000/-

5. and onwards

NIL

NIL

 AP- Annualized premium

FV-Fund value

Provided that where a policy is discontinued, only discontinuance charge and Fund management charge, which shall not exceed 50 bps per annum on discontinuance fund/policy account value, as applicable,  may be levied by the insurer and no other charges by whatsoever shall be levied.

Provided that no discontinuance charges shall be imposed on top ups premiums.”

  1. The complainant deposited four installment @ Rs5004/- = Rs.20016 for policy in question.  Complainant failed to deposit the regular premium afterwards, hence discontinuance of the policy occurred in the first year.   
  2. Therefore, as discussed above, the present complaint is partly allowed and the OP is directed to pay surrender value as per IRDA (Supra).Further, OPs is directed to pay compensation of Rs.2,000/- and litigation expenses of Rs.1,000/-. 
  3. The above said entire compliance be made by the OP within a period of 45 days from the date of receipt of copy of this order.
  4. Copies of the order be sent to the parties, as permissible, under the rules.
  5. File be indexed and consigned to record room.

Dated:05.05.2023

                   (Kuljit Singh)

                       President

 

(Ramesh Kumar Gupta)                                     (Ranvir Kaur)

          Member                                                            Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

              

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