BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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Gursatpal Kaur wife of Late Shri Nardev Singh r/o H.No.612, Main Road, Kalka, Panchkula.

….…Complainant

                           V E R S U S

Max New York Life  Insurance Co. Ltd., SCO No.36-38, 2^nd Floor, Sector 8-C, Manimajra, Chandigarh through its Manager.

                           ..…Opposite Party

CORAM:   SHRI P.D.GOEL                                   PRESIDENT                  SH.RAJINDER SINGH GILL,                 MEMBER

              DR.(MRS) MADANJIT KAUR SAHOTA   MEMBER

Argued by:Sh.Gagan Aggarwal, Counsel for Complainant.

 Sh.Varun Chawla, Proxy Counsel for Sh.Rajneesh Malhotra, Counsel for OP.

PER RAJINDER SINGH GILL, MEMBER

             In brief, the facts of the case are that the husband of the complainant- got insured himself for sum of Rs.2.50 lacs vide insurance policy No.446722993 with date of commencement as 03.11.2007 and the said policy was to mature on 03.01.2017 against the annually premium of Rs.25000/-. It has been averred that the L.A. could not deposit the third installment due to his illness as such the policy was closed. It has been averred that the L.A. died due to his illness on 07.02.2010. OP sent a letter along with cheque dated 21.06.2010 for an amount of Rs.44460.98P (Annexure C-2). It has been asserted that OP never sent notice regarding the lapse of the insurance policy on account of non-payment of the third premium and therefore, the complainant is entitled to the sum assured of Rs.2.50 lacs. Hence, this complaint seeking refund of the sum assured of Rs.2.50 lacs.

2.             In the written reply filed by the OP, the facts with regard to the issuance of the insurance policy and the factum of death of the L.A. have been admitted.  However, it has been pleaded that the policy was lapsed due to non-payment of the annul premium and therefore, the contract of insurance came to end. It has further been pleaded that the L.A. had taken the unit linked policy and therefore, surrender charges for the amount invested in growth fund was payable to the insured. It has been pleaded that the OP sent lapse intimation vide letters dated 13.12.2009 and 11.02.2010 (Annexure R-4 and R-5) but to no effect. According to the OP, the amount of Rs.44460.98 vide cheque No.855836 dated 21.06.2010 (Annexure R-5) was rightly sent to the complainant as per clause No.16 and 17 of the terms and conditions of the insurance policy. Pleading that there has been no deficiency in service on its part, prayer for dismissal of the complaint has been made. 

3.             Parties led evidence in support of their contentions.

4.             We have heard the learned counsel for the parties and have also perused the record. 

5.             It is admitted case of the parties that the husband of the Complainant (S.Nardev Singh) had taken the policy in question from the OP Insurance Co., which was for a period of 10 years, with date of maturity as 03.11.2017 and the premium of Rs.25,000/- was to be paid every year in the month of November. The husband of the Complainant filled the proposal form Annexure R-1 and the Policy Annexure R-2 was issued to him on 03.11.2007, along with the terms and conditions of the Policy.

6.             Undisputedly, the second installment was paid by the husband of the Complainant in November, 2008 and subsequently, because of ill health, he could not pay the third installment and he died on 07.02.2010. The OP had contended that the terms & conditions of the policy were well explained to the husband of the Complainant and as per Col. No. 9 of the proposal form, he had opted for 100% investment in the growth super fund (unit linked policy).  As the third installment was not paid by the late husband of the Complainant, the OP sent a reminder on 09.10.2009 Annexure R-3, reminding him to pay the due premium.  However, he did not pay the premium, which was due on 03.11.2009.

7.             A close perusal of terms & conditions of the insurance policy reveals that in case the premium was not paid on or before the due date or within the grace period of 30 days, the Policy would automatically lapsed, as per clause 16 of the terms & conditions of the policy. Clause 16 of the Policy reads as under:-

“16.     Lapse.

16.1    Discontinuation of premiums after paying at least three consecutive years premium.

a)        If all the due Annual Target Premiums have been paid for at least three consecutive years and subsequent Annual Target Premiums are unpaid, an opportunity will be given to you to revive the policy within the revival period as mentioned in Clause 17 below.

b)        During the revival period, the insurance cover under the policy will continue and all un-recovered charges would be levied.

c)        At the end of the revival period, if the policy is not revived, the policy including riders will terminate and the guaranteed surrender value, if any will be paid. However, we may instead of terminating the policy, offer to continue the policy including riders with the insurance cover, if so opted by you, levying appropriate charges until the fund value does not fall below an amount equal to one Annual Target Premium. 

16.2    Discontinuance of premiums within three years of inception of the policy:-

a)        If all the Annul Target Premiums have not been paid for at least 3 consecutive years from the effective date of coverage, the insurance cover/ sum assured under the policy and applicable Riders, if any, shall cease immediately on expiry of the grace period and the Unit Account will be closed.

b)        We will give you an opportunity to revive the policy within the revival period as mentioned in clause 17 below.

c)        In case the policy is not revived during the revival period, the policy including riders will terminate and the guaranteed surrender value as at the date of lapse, if any, shall be paid at the end of third policy anniversary or at the end of the revival period, whichever is later.”  

8.             Since the policy had lapsed due to the non-deposit of the annual premium, the contract of the insurance had come to an end.  The OP Insurance Co. had also sent a lapse intimation letter dated 13.12.2009 and subsequently letter dated 11.02.2010 to the insured qua Annexure R-4 and R-5, respectively.

9.             Since the Complainant had taken a unit linked policy and, therefore, surrender charges for the amount invested in growth fund was payable to the insured. Accordingly, the amount of Rs.44,460.98/- was sent to the Complainant vide Cheque No. 855836, dated 21.06.2010, as per the terms and conditions of the insurance policy, which was not encashed by the Complainant.

10.           From the above detailed analysis of the entire case, we partly accept the complaint and decide the same in favour of the Complainant and against the OP. The OP is directed to issue the cheque of Rs.44,460.98P after its revalidation to the Complainant, within a period of thirty days from the date of receipt of the certified copy of the order. However, in the facts and circumstances of the case, there shall be no order as to costs.

11.           Certified copies of this order be sent to the parties free of charge. The file be consigned.