Haryana

Karnal

CC/104/2017

Vijay Pal - Complainant(s)

Versus

SBI Life Insurance Company Ltd - Opp.Party(s)

Abhay Sahu

07 Nov 2017

ORDER

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM KARNAL. 

                                                     Complaint No. 104 of 2017

                                                    Date of instt.20.3.2017

                                                     Date of decision 07.11.2017

 

Vijay Pal son of Shri Hari Pal, resident of House no.1002, Gali no.8, Hansi Road, Karnal.      

                                                                                 ……..Complainant.

                                        Versus.

SBI Life Insurance Company Ltd. SCO no.144, 2^nd floor, near OPS Vidhya Mandir School, Urban Estate, Karnal.

 

                                                                      ..…Opposite Party.

 

 Complaint u/s 12  of the Consumer Protection Act 1986.

 

Before     Sh. Jagmal Singh……….President.

                Ms. Veena Rani………Member

                Sh.Anil Sharma…….Member.

 

Present:   Sh. Abhay Sahu Advocate for the complainant.

                 Sh. N.K.Zak Advocate for opposite party.

                 

       

                (JAGMAL SINGH, PRESIDENT)

 

 ORDER:

 

                This complaint has been filed by the complainant u/s 12 of the Consumer Protection Act 1986, on the averments that he had purchased three insurance policies vide policy no.17010311810 commencing from 3.8.2012 for his son Vineet and the quarterly premium was Rs.2566/- for a sum assured of Rs.1,00,000/- and also purchased another policy vide policy no.17010318707 commencing from 3.8.2012 for his daughter namely Rupakshi and the quarterly premium of Rs.2154/- for Rs.1,00,000/- and policy no.17010313810 commencing from 3.8.2012 for his daughter Leena and the quarterly premium was Rs.1872/- for Rs.1,00,000/-. The complainant had paid Rs.20376/- in policy no.17010311810, Rs.17104/- in policy no.17010318707 and Rs.14,864/- in policy no.17010313810 till May 2014. Thereafter, he could not deposit the premium/installment of policies to the OP due to some family problems and till today he approached the OP for surrender the abovesaid policies in the month of March 2015. On 1.3.2017 he visited the office of OP and requested to return the amount lying in the aforementioned policies alongwith interest, but the OP did not pay any heed to his request. In this way, there was deficiency in service on the part of OP hence complainant filed the present complaint.

2.             Notice of the complaint was given to the OP, who appeared and filed written statement raising preliminary objections with regard to time barred; terms and conditions of the policies, which are duly approved by the IRDAI and deficiency in services. On merits, it has been submitted that complainant has applied for SBI Life Scholar 2 insurance policies, vide three proposals dated 31.7.2012. Polices were issued with date of commencement 3.8.2012 and documents no.17010318707, 17010311810 and 17010313810 to the address of the complainant on 6.8.2012, 8.8.2012 and 6.8.2012 through speed post. In accordance with the IRDAI regulations, as per the point no.9.1 Freelook period 13 “if the policy holder is not satisfied with the terms and conditions of the policy, he/she can return it back, stating the reasons for his/her objection, 15 days for the policies sourced through any channel other than distance marketing and 30 days from policies sourced through distance marketing from the date of receipt of this policy document”. It has further been submitted that OP has received total seven quarterly premiums under each policy upto the due date 3.2.2014. The next renewal premium was due on 3.5.2015, but the complainant did not pay the premium for the due date 3.5.2014 and thereafter under all the policies. Hence the policies lapsed with effect from the due date 3.5.2014. For availing any benefit under the policy, minimum three policy years’ premiums have to be paid. In the instant case, seven quarterly premiums have been paid and hence policies have not acquired any paid up value and hence no benefit is available under the policy as on date. However, the complainant has an opportunity of revival. If the policies are not revived within the stipulated revival period. The policies will not acquire the paid up value. The premiums received under the policies also would be forfeited.

Premium Payments

If, within the first three years following the date of commencement of the risk, the premium is not paid within the grace period, the policy will automatically lapse.

Paid-up value

If premiums have been paid regularly for at least three consecutive years….”

Revival of the policy

A lapsed policy may be revived during the life time of the life assured within a period of five years from the date of first unpaid premium and before the last premium is due……..”

Surrender Value

For the policies with a premium payment term greater than or equal to six years: The policy will acquire surrender value after 36 months….”

It has further been submitted that as per terms and conditions of the policies, the policies will acquire the surrender value, if first 36 months premiums have been paid in full. However, the complainant has paid premiums for only 21 months, hence the policies have not acquired any surrender value. Hence, the complainant is not entitled to get the surrender value under these policies. There is no provision in the terms and conditions of the policy for refund of premium at this point and hence the OP is unable to accede to the request of complainant for refund of premium either with or without interest. Hence there was no deficiency in service on the part of the OP and prayed for dismissal of the complaint.

3.             Complainant tendered into evidence his affidavit Ex.CW1/A and documents Ex.CW1/A and documents Ex.C1 to Ex.C15 and closed the evidence on 19.9.2017.

4.             On the other hand, OP tendered into evidence affidavit of Neelam Singh Ex.OP1/A and documents Ex.O1 to Ex.O6 and closed the evidence on 19.4.2017.

5.             We have heard the learned counsel for both the parties and perused the case file carefully and have also gone through the evidence led by the parties.

6.             It is admitted case of the parties as is clear from the pleadings that complainant purchased three policies detail mentioned above from the OP. According to OP  they have received total seven quarterly premiums under each policy upto the due date 3.2.2014. whereas according to the complainant 8 quarterly premium were paid to the OP and to prove the same complainant produced the receipts Ex.C-7 to Ex.C-15. From these receipts it is clear that the complainant has deposited 8 quarterly premium which means the complainant has paid premium for 2 years in each policies. The complainant applied for refund of the amount of premium paid for 2 years and the OP refused to refund the same on the ground that as per terms and conditions of the policies, the complainant is not entitled for any refund  as the policies have been lapsed. Therefore, the question arises that whether the complainant is entitled for refund of premium paid or not?

7.             The insurance policies are the contract between the parties and the parties are bound by its terms and conditions which are the part of the contract. The OP has placed the copy of policy including its terms and conditions as Ex.O-4.

        Firstly there was an option of freelook period in the policies and according to same, the complainant can cancel the policies within 15 days of the receipt of the policy document, but the complainant did not cancel the policies under this clause. Thereafter, the clause 2(a) and (b) are relevant regarding premium payment which runs as under:-

a) A grace period of 30 days from the Due Date of Premium will be allowed for payment of quarterly/half yearly premiums and a grace period of 15 days will be allowed where premiums are paid monthly.

 

b) If, within the first three years following the Date of Commencement of Risk, the premium is not paid within the grace period, the policy will automatically lapse.

 

In the present case according to the complainant himself, he paid premiums for two years and no premium was paid thereafter. Therefore, according to abovementioned clause, all the three policies of the complainant were automatically lapsed. It is pertinent to mention here that the terms of the policies of the complainant are 16 years as is clear from the copy of policy on the file. Thereafter, the relevant clause is surrender value which is clause 4 and runs as under:-

4) Surrender Value:

    Regular premium policies:

    For policies with a premium paying term less than six years

The policy will acquire guaranteed surrender value after 24    months from the Date of Commencement of Risk provided all premiums due during the first 24 months respectively have been paid in full. The cash surrender value will be 60 per cent of the premiums paid less first year premiums, extra premiums and rider premiums paid, if any.

 

For policies with a premium paying term greater than or equal to six years:-

The policy will acquire guaranteed surrender value after 36    months from the Date of Commencement of Risk provided all premiums due during the first 36 months have been paid in full. The cash surrender value will be 65 per cent of the premiums paid less first year premiums, extra premiums and rider premiums paid, if any.

As already stated above the policies of the complainant were for 16 years, therefore, according to these clauses, the policies of the complainant have not acquired any surrender value because the complainant has not paid premium for 36 months.

8.             Lastly, the relevant clause is Revival of the policy which is mentioned in clause 5 which is as under:

 

5)  Revival of the Policy:

     A lapsed policy may be revived during the life time of the Life Assured with a period of 5 years from the due date of first unpaid premium and before the Date Last Premium is Due, on submission of evidence of health satisfactory to the company and payment of arrears of premium with interest at the rate stipulated by the company from time to time. The company however reserves the right to accept or reject the revival of a discontinued policy, or accept the revival subject to such conditions as may be stipulated at the sole discretion of the company. The revival of a policy will be effective only after the company communicates the same in writing to the policyholder.

 

        According to this clause, the complainant can revive his policies within 5 years from the date of unpaid premium. In the present case the date of unpaid premium is 3.8.2014 and the complainant can revive his policies upto 3.8.2019. Moreover, the ld. Counsel for OP also admitted that the complainant can get revived his policies as per the terms and condition of the policy.

9.             In view of the above discussions, we are of the view that all the policies of the complainant have lapsed for non-payment of premiums and the same have acquired no surrender value as per the term and condition of the policy. Hence the complainant has failed to prove any deficiency on the part of the OP.

10.           Thus, as a sequel to above discussions, we find no merits in the complaint and the same is hereby dismissed. However, the complainant is at liberty, if he desire so, to get revive his polices as per the terms and conditions of the policy. No order as to costs. The parties concerned be communicated of the order accordingly and the file be consigned to the record room after due compliance.

Announced

Dated: 07.11.2017

                                                                  

                                                                  President,

                                                         District Consumer Disputes

                                                        Redressal Forum, Karnal.

 

 

                        (Veena Rani)       (Anil Sharma)

                          Member                Member