O R D E R
Adv.Ravi Susha, Member.
The complainant’s son Joji Joseph had availed a money back policy from LIC of India, Chathannoor branch for a sum assured of Rs. One lakh. The premium was half yearly which was
(2)
fixed at Rs.3243/-. He had paid premium for one year ie up to 28.08.2006. The life assured was working at Maharashtra and he died on 11.09.2006 in an accident. The complainant submitted claim form before the opposite party but it was repudiated on the ground that the life assured has not paid premium for 3 years and also the premium was not inforce. As per status report dtd: 20.09.2006 the policy was in for force. The complainant is filed for realization for the policy amount.
Version :-
A policy of Insurance bearing No.783044226 was issued on the life of Joji Joseph for a sum assured of Rs.1,00,000/- with the date of risk commencing from 28.07.05 and for a term of 20 years. The consideration for the contract of insurance viz; the premia was payable on 28th January and July every year at the rate of Rs.3,243/-.The Life Assured had paid premium on the policy due upto 28.01.06. Hence the policy became lapsed from 28.07.2006 due to the non-payment of premium due on 28.07.2006 and thereafter there was no contract of Insurance under the said policy from 28.07.2006. As per the policy conditions a grace period of one month, but not less than 30 days, is allowed for payment of yearly, half yearly, or quarterly premiums and 15 days for monthly premium. If the premium is not paid before the expiry of the days of grace, the policy lapses. If any policy results into death claim, the policy
(3)
should be in force for the claim to be payable. The date of first unpaid premium under the above policy is 28.07.06 and the premium should have been paid on or before 28.08.06; within the period of grace. But the premium was not paid with in days of grace to treat the policy as in force. The death occurred on 11.09.06. At the time of death the policy was in a lapsed condition due to non-payment of premium due on 07/06. No claim arises from a lapsed policy. Life assured had a contractual obligation to keep the policy in force. Hence nothing is payable under the policy. The averments in the complaint otherwise are false and hence denied. No benefits accruded on a lapsed policy. The Life assured had failed to arrange for the continued payment
of premium and had thus caused the policy to lapse. As such no amount was payable under the said policy.
As per Section 113 of the Insurance Act 1938 and as per the condition No.4 of the Policy No.783044226 (Printed on the back of the policy) the policy will acquire any value only if the premium there under is paid for a minimum period of three years. In the instant case the life assured Joji Joseph had paid premium for a period of 1 year only. Hence as per the terms and conditions of the policy the policy had lapsed without acquiring any value and hence no amount was payable on the policy. Hence this opposite party is not liable to pay any amount to the complainant.
(4)
Points:-
1. Whether there is any deficiency in service on the part of
Opposite party?
2. Relief and cost.
Points (1) & (2)
There is no dispute with regard to policy and also the death of the life assured. According to opposite party at the time of death of the life assured the policy was not in force. Opposite party contended that the premium due on July 2006 was not paid. According to complainant the life assured paid the premium up to 28.08.2006. The complainant’s contention is that the policy was in force as per Ext.P3 status report. Opposite party contended that Ext.P3 is the computer print out of the policy status taken on 20.09.2003. Even though the status of the policy shown in Ext.P3 is in force, there is a system error happened which has been subsequently rectified. In such a situation the burden is on the complainant to prove that the life assured had paid the premium up to 28.08.2006. For proving the remittance of premium, the complainant produced only Ext.P4 premium receipt. That shows that the complainant paid the first premium on 28.07.2005 ie Rs.3243/-. Ext.P4 reveals that the next due date is on 01/2006. As per policy condition a grace period of one month, but not less
(5)
than 30 days is allowed for payment of yearly, half yearly and quarterly premium. If the premium is not paid before the expiry of the days of grace the policy lapses, if any policy results into death claim, the policy should be in force for the claim to be payable. From the available evidence ie premium receipt, it can be seen that at the time of death the policy was in a lapsed condition due to the non-payment of premium. During evidence time PW1, deposed that the life assured has paid the premium dtd: 07/2006. But no material is before the Forum for supporting the said version of PW1. According to opposite party Ext.P3 is a print out of status report which shows that the policy is in force. Their contention is that this is a system error. On considering the entire evidence we are also of the view that there is system error occurred in Ext.P3 and at the time of death of the son of the complainant; policy was not in force. As per Section 113 of the Insurance Act 1938 and as per the condition No.4 of the policy, the policy will acquire any value only if the premium under one paid for a minimum period of three years. Here the life assured had not paid premium for three years. Hence as per the terms and conditions of the policy the policy had lapsed without acquiring any value. There is no deficiency in service on the part of opposite party.
(6)
In the result the complaint fails and is dismissed without cost.
Dated this the 29th day of December 2010.
Adv.Ravi Susha :Sd/-
R.Vijayakumar :Sd/-
List of witnesses for the complainant
PW1 - Petritia
List of documents for the complainant
P1 - Original Policy with conditions
P2 - Death Certificate
P3 - Status Report
P4 - Premium Receipt
List of witnesses for the opposite party
DW1 - L.Chandrasekharan
List of documents for the opposite party
D1 - Letter dtd: 05.10.06
D2 - Status Report of Policy
// Forwarded by Order //
Senior Superintendent
