By Jayasree Kallat, Member
The petition was filed on 16.04.10.The complaint is filed under section 12 of the consumer protection Act. The complainant had taken a Life Insurance Policy from the opposite party. The policy No. was REG 1369893. It was an easy life plus-Unit linked policy. Policy commenced on 17.11.2006 for a sum assured of Rs.4,00,000/- premium amount to be paid was Rs.40,000/-. The maturity date of the policy was 17.11.2021.Complainant had paid Rs.40,000/- as the first premium on 19.10.2006 along with duly filled and signed proposal form. The complainant was preparing coaching for the entrance examinations at the time of taking the policy. There after complainant joined MBBS course in Kannur Medical College, Anjarakandy. For the subsequent years complainant could not pay the annual premium due to huge expenses incurred for her entrance coaching and professional studies. Thus the policy has lapsed. Therefore the complainant decided to surrender the policy and obtained the surrender value eligible to her. When the complainant contacted the opposite parties regarding the formalities for surrendering the policies the opposite parties denied any amount towards the surrender value. Complainant had paid Rs.40000/- towards the first annual premium. When the complainant requested to refund the surrender value, opposite party had refused to pay the surrender value. The refusal on the part of the opposite parties is against principles of natural justice and it amounts to unfair trade practice. No such conditions of in eligibility to get the surrender value in case of the policy lapse were incorporated in the proposal form. The complainant had monitory loss and mental agony. Hence this petition is filed seeking relief.
Opposite party filed version denying the averments in the complaint except those that are expressly admitted. Easy Life plus is a simple unit linked endowment plan with the benefit of Life protection. The terms and conditions of this scheme are of stipulated as governed by Insurance regulatory development authority. Complainant submits completed proposal form along with initial premium amount of Rs.40000/- after a detailed discussion with the representatives of this opposite parties and going through the key feature document. Article 4.1 of the standard terms and conditions of the policy clearly specify that “it is condition precedent to the company’s liability to make payment under this insurance that there has been payment of the regular premium by the policy holders. If the regular premium is not paid in the manner or amount or at the time provided for, then the opposite party will allow a period of grace of 30 days from the date upon which the regular premium should have been paid.” As per article 5.1 if an installment of regular premium is not paid within the period of the grace from its due date as defined in article 4.1 and a due date is less than 24 months from the commencement date then the insurance will be deem to have immediately lapsed with value. The complainant had entered into a contract of insurance with the opposite party as per the standard terms and conditions referred in the contract. The complainant after remitting the first premium amount never paid the future premium amount of the installments which was due from 17.12.2007. Opposite party had communicated to the complainant though letter dtd.15.01.2008 that the policy has lapsed due to non payment of the renewal premium. A policy holder is entitled to receive a surrender value upon termination of the insurance for any reason other than the death of the insured provided that regular premiums have been paid for at least 2 full policy years. As per terms and conditions 3 regular premiums are required to be paid so that policy can attain a surrender amount. The opposite party is bound to follow the rules and regulations (IRDA) and has performed their part of contract according to the terms stipulated. There is no deficiency in service on the part of the opposite party. The complainant is not entitled for any relief. Complainant has paid only single premium towards the policy and thereafter stopped making payment towards the policy. Hence the policy lapsed without value which is very well within terms and conditions of the policy. Hence opposite party prays to dismiss the complaint with cost to opposite party.
The only point for consideration is whether the complainant is entitled for any relief?
No oral evidence adduced neither by the complainant nor the opposite party. Exts.A1 to A4 marked on complainant’s side and Ext.B1 & B2 marked on opposite party’s side.
The case of the complainant is that she had attained a unit linked endowment plan (Easy Life Plus) policy from the opposite party Aviva Life Insurance. The policy commenced on 17.11.2006 complainant had paid initial premium amount of Rs.40000/- for the policy. According to the complainant after paying the first premium she had got admission for the MBBS Course in Kannur Medical College. Due to the huge expenses for her entrance coaching and professional studies she could not pay the annual premium amount of the policy for the subsequent years. Thus the policy lapsed. Hence complainant had surrendered the policy to obtain the policy value eligible to her. When the complainant enquired for the surrendered value to the opposite party, they had refused to pay any amount to the complainant. The complainant had filed this petition alleging unfair trade practice on the part of the opposite party for not returning back the surrender value to her. In this context opposite party has taken a contention that opposite party had acted according to the rules and conditions of the policy which is regulated by Insurance Regulatory and Development Authority. Opposite party’s definite case is that the complainant has paid only the first premium thereafter she had discontinue to pay the premium which caused the policy to be lapsed . The complainant had the liberty to renew the policy for which opposite party has given a grace period. But the complainant has not renewed the policy. Opposite party had produced Ext.B2 document which refers to surrender value According to article 10.1 mentioned that policy holder is eligible for surrender value provided that regular premiums have been paid for at lease two full policy years. In this case complainant has not paid any premium after the first one. The opposite party has argued that they are bound to follow the rules and regulations of IRDA. Hence there was no deficiency of service on the part of opposite party .The complainant had a chance to reconsider to review the policy and cancel the policy within a period of 15 days from the date of receipt of the policy document. If the policy had been cancelled within the free look notice period the premium paid would have been refunded to the complainant after adjusting for advance movement in unit prices less charges incurred on account of stamp duty and medical expenses if any. This was in accordance with the IRDA (Protection of policy holder’s interest) Regulation Act 2002. The complainant had not approach the opposite party within free look period of 15 days after receiving the policy in order to cancel the policy. The forum has considered all the different aspects in this case along with the documents submitted by both parties. We have reached a conclusion that as no deficiency of service is found on the part of the opposite party this complainant is not entitled for any relief.
In the result the petition is liable to be dismissed.
Pronounced in the open court this the9th day of January 2012.
Date of filing:16.04.2010.
SD/-PRESIDENT SD/-MEMBER SD/-MEMBER
APPENDIX
Documents exhibited for the complainant:
A1.Photocopy of first premium Receipt of Rs.40,000/- dtd.17.11.2006 issued by the
opposite party to the complainant.
A2. Photocopy of Policy document issued by the opposite party to the complainant
A3. Photo copy Lawyer notice dtd.29/07/09 issued by the counsel for the complainant to
the opposite party with postal receipt and acknowledgement card.
A4.Reply notice dtd.19.10.09 send by the opposite party to the counsel for the
Complainant(Photocopy)
Documents exhibited for the opposite party:
B1.Palmlet of Easy Life plus policy.
B2. Terms and conditions of the policy.
Witness examined for the complainant.
Nil
Witness examined for the opposite party:
None
Sd/-President
//True copy//
(Forwarded/By Order)
SENIOR SUPERINTENDENT.
