Kerala

Idukki

CC/104/2019

Vinodan E R - Complainant(s)

Versus

Life Insurance Corporation Of India - Opp.Party(s)

26 Dec 2019

ORDER

DATE OF FILING :29/05/19

IN THE CONSUMER DISPUTES REDRESSAL FORUM, IDUKKI

Dated this the 26^th day of December 2019

Present :

SRI. S. GOPAKUMAR PRESIDENT

SMT.ASAMOL P. MEMBER

 

CC NO.104/2019

Between

Complainant : Vinodan E.R.,

Edatarambin House, Konnathady P.O.,

Muthirapuzha.

(By Adv: Shiji Joseph)

And

Opposite Party : 1 . Life Insurance Corporation of India,

Branch Office, Jeevan Jyothi,

P.B.No.12, Adimali – 685 561.

Represented by Branch Manager.

2 . LIC of India, Kottayam,

Represented by Divisional Manager.

(Both by Adv: M.V.Francis)

 

O R D E R

SRI. S. GOPAKUMAR (PRESIDENT)

 

The case of the complainant is that,

 

The complainant joined a policy with the first opposite party. The policy was commenced on 28/01/2004. The sum assured was Rs.50,000/- and the half yearly premium amount was Rs.1,812/-. It was assured by the agent of the first opposite party that the maturity amount may come around Rs. One Lakh. From the insurance policy complainant availed a loan of Rs.45,256/- on 20/04/16. In the month of January 2019, the opposite parties without the knowledge or consent of the complainant closed the policy and transferred an amount of Rs.7,060/- a balance policy amount. The opposite parties were no right to close the policy without the consent of the complainant, and it is the deficiency in service on the part of the opposite parties.

(Cont....2)

-2-

Hence the complainant filed this petition for seeking relief such as to direct the opposite parties to resume the policy and allow the complainant to continue the policy till its maturity and further direct the opposite parties to pay compensation and cost.

 

Upon notice opposite parties entered appearance and filed detailed reply version admitting the insurance of such a policy. Opposite parties further contented that they issued the policy to the complainant to cover the risk during the period from 28/01/2004 to 28/01/2019. ie for 15 years, subject to the payment of premium for the full period and the contract entered into by LIC with the complainant is completed and fulfilled by the LIC.

 

Opposite parties further contented that policy bearing No.392715756 was issued by LIC's under LIC's Endowment Plan (Table No.14) to the complainant. The sum assured was Rs.50,000/-. The complainant opted payment of premium half yearly @ Rs.1,812/-. The complainant paid 12 ½ years premium only. The policy holder complainant is entitled to get sum assured and vested bonus on maturity date if all premiums would have been remitted by the life assured till maturity. Bonus is declaring every year based on the valuation surplus generated by the LIC which may vary from year to year. The assurance of one Lakh on maturity value is totally baseless.

 

The opposite parties further contented that the complainant has taken a policy loan of Rs.45,256/- on 20/04/2016 by assigning the policy to LIC. At the time of taking the loan, the premium was paid up to 28/07/2016. As per the policy conditions the complainant has to pay loan interest 10% payable half yearly. After obtaining the loan complainant failed to remit the further premium till the maturity for getting full Sum Assured and Bonus for the full term.

 

The contract between the complainant and LIC is to provide insurance for the period from 28/01/2004 to 28/01/2019 for a sum assured of Rs.50,000/-. Actually LIC has not closed the loan as alleged, but has settled the maturity claims under the said policy on 30/03/19, since the policy had already been matured on 28/01/19. In respect of lapsed policies having paid up values, LIC is sending claim intimation about 6 months in advance, so the policy holder can

(Cont....3)

-3-

take necessary steps to revive the policy, if he wants so. In this case LIC had sent claim intimation letter dated 12/07/18 and 01/08/18, six months in advance under registered post. Said registered intimation was not returned undelivered.

 

Opposite parties further contented that the policy of the complainant was lapsed with effect from 28/07/16 due to the non-remittance of the premium from 28/07/16. Since the complainant's, the policy holder, had not remitted premium for the full term of 15 years, the said policy is eligible only for Reduced Sum Assured and Proportionate Bonus as per the policy condition 4 of the title “Non- Forfeiture Regulations”. A reduced paid up policy shall not be entitled to participate in future bonus from the date of lapse. Hence the policy is eligible for Reduced Sum Assured and Bonus for the period for which premium has actually paid.

 

In this case paid up Sum Assured was Rs.41,667/- and its bonus for the premium paid period was Rs.24,725/-. Hence a total amount calculated is Rs.66,392/-. Out of this Rs.45,256/- being the outstanding loan amount and its interest of Rs.14,076/- was deducted. The balance amount of Rs.7,060/- had been credited to the complainant's bank account through NEFT on 30/03/19. More over there is no provision for revive the policy after the date of maturity and request to resume the policy after expiry of maturity date is not possible as per the terms and conditions. The opposite parties has settled the maturity claim as per the terms of the policy. So there is no deficiency in service on the part of the opposite parties.

 

Evidence adduced by the complainant by way of documents. Complainant produced receipt and marked as Ext.P1.

 

From the opposite parties side Ext.R1 to Ext.R7 were produced and marked. Ext.R1 is the copy of proposal form, Ext.R2 is the copy of policy bond, Ext.R3 is the copy of loan application, Ext.R4 is the copy of notice of policy maturity claim, Ext.R5 is the maturity claim transfer details, Ext.R6 is the loan interest statement, Ext.R7 is the Bonus accumulation details.

 

Heard both sides,

(Cont....4)

-4-

The point that arose for consideration is whether there is any deficiency in service from the part of opposite parties, and if so, for what relief the complainant is entitled to ?

 

The Point:- We had heard the counsel for both parties and had gone through the documents. It is an admitted fact that complainant took a policy from the first opposite party under LIC Endowment Plan to cover the risk during the period from 28/01/2004 to 28/01/2019 for 15 years. The sum assured was Rs.50,000/- and the complainant opted payment of premium half yearly @ Rs.1,812/-. The complainant paid 12 ½ years premium instead of 15 years.

 

On perusing the evidence on record it is seen that complainant has taken a policy loan of Rs.45,256/- on 20/04/16 by assigning the policy to LIC. At that time, the premium was paid up to 28/07/16. After availing the loan, the complainant failed to remit further premiums under the policy. As per the conditions of the policy, the holder has to remit premium till the maturity for getting Full Sum Assured and Bonus for the full term. Hence the complainant is eligible for getting Reduced Sum Assured and Bonus for the premium paid period ie 12 ½ years only.

 

In this case, it is very pertinent to note that the maturity date of this policy was 28/01/19. As per the insurance contract the complainant is bound to remit the premium for the whole period for getting full benefit as per the policy condition. But the complainant remitted premium only 12 ½ years and the policy was matured on 28/01/19. As per the policy condition in respect of lapsed policies having paid up value, LIC is sending claim intimation about six months in advance. In this case LIC intimated this matter to the complainant before 6 months of its maturity ie, on 12/07/18 through registered post. Thereafter the opposite parties settled the maturity claim in the said policy.

 

The contention raised by the opposite parties in their reply version has not challenged by the complainant with clear and cogent evidence. Complainant has not a case that, he has not received a letter from opposite parties dated 12/07/18. More over complainant has not a case that he remitted the entire premium for the whole policy period of 15 years.

(Cont....5)

-5-

Hence the contention of the opposite parties that, as per the condition No.4 under the tile “Non- Forfeiture Regulations” A reduced paid up policy shall not be entitled to participate in future bonus from the date of lapse. Hence the policy is eligible for Reduced Sum Assured and Bonus for the period for which premium has actually paid in admissible. Moreover it is also taken into consideration that there is no provision for revive the policy after the date of maturity and request to resume the policy after the expiry of maturity date is not possible as per the policy terms and conditions.

 

Here it is an admitted fact that, the opposite parties intimated the expiry of the policy six months before its maturity date to the complainant by giving him a chance to revive it for enjoying the full benefit of the policy. But the complainant failed to do so. Hence he lost the chance of revival and after intimation the opposite parties LIC settled the claim for Rs.66,392/-. After deducting the loan and interest of Rs.59,332/- the opposite parties credited the balance amount to the complainant account on 30/03/19, complainant has not raised any objection at the time of receipt of this amount.

 

On perusing the entire materials on record it is seen that the act of the opposite parties LIC is based on condition of the policy. At the same time complainant has not adduced any evidence to rebut the contention of the opposite parties.

 

Hence we are of the considered view that the LIC acted bonafidely and based on the terms and condition of the respective policy and no evidence is produce by the complainant to prove that the act of the opposite parties amounts to deficiency in service. Under the above circumstances complaint dismissed. No order to cost or compensation.

 

Pronounced in the Open Forum on this the 26^th day of December, 2019.

Sd/-

SRI. S. GOPAKUMAR (PRESIDENT)

Sd/-

SMT. ASAMOL P. (MEMBER)

 

(Cont....6)

-6-

 

APPENDIX

 

Depositions :

On the side of the Complainant :

Nil

On the side of the Opposite Party :

Nil

Exhibits :

On the side of the Complainant :

Ext.P1 - Receipt

On the side of the Opposite Party :

Ext.R1 -The copy of proposal form

Ext.R2 -The copy of policy bond

Ext.R3 -The copy of loan application

Ext.R4 -The copy of notice of policy maturity claim

Ext.R5 -The maturity claim transfer details

Ext.R6 -The loan interest statement

Ext.R7 -The Bonus accumulation details.

 

 

Forwarded by Order,

 

SENIOR SUPERINTENDENT