Karnataka

Kolar

CC/47/2022

Smt.K.J.Renuka - Complainant(s)

Versus

The Branch Manager, LIC of India - Opp.Party(s)

20 Jan 2023

ORDER

Date of Filing: 11/10/2022

Date of Order: 20/01/2023

BEFORE THE KOLAR DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, OLD D.C. OFFICE PREMISES,KOLAR – 563 101.

 

Dated: 20^thDAY OF JANUARY 2023

SRI.SYED ANSER KALEEM, B.Sc., B.Ed., LL.B., …… PRESIDENT

SMT.SAVITHA AIRANI,B.A.L., LL.M., …..LADY MEMBER

CONSUMER COMPLAINT NO :: 47 OF 2022

Smt. K.J. Renuka,

W/o. Late B.S. Sathayanarayana,

Aged About 42 Years,

R/at: No.800, Darble Street,

(Brahmin Street), Kolar.

(Rep. by Sri.Jagadeesh Babu, Advocate)                   ….  Complainant.

 

- V/s -

The Branch Manager,

LIC Of India, K.G.F. Branch,

K.G.F.

(Rep. by Sri.A.V.Ananda, Advocate)                           …. Opposite Party.

-: ORDER:-

BY SMT. SAVITHA AIRANI, MEMBER.

01.   The complainant has filed this complaint Under Section 35 of the Consumer Protection Act 2019 against the OP alleging deficiency in service and prays to direct the OP to settle the policy claim along with interest @ 18% per annum from the date of complaint till realization along with compensation and such other reliefs as this Commission deems fit.

02.  The brief facts of the complaint is that, the husband of the complainant B.S. Sathyanarayana was died on 04.03.2021 at Chennai Hospital.  During his life time he obtained Health Plus Plan LIC bond from OP vide policy bearing No.364522511 commenced on 15.05.2009 and expired on 15.05.2035.  The husband of the complainant had paid the premiums regularly till 15.05.2020 and the complainant is the nominee to the said policy.  The complainant further submits that, after the death of her husband, she approached the OP for settlement of the said policy and also given requisition letter dated: 03.08.2021 along with original documents, but the OP not responded properly nor settled the claim even to this day.  Hence the complainant issued legal notice to the OP on 24.05.2022 calling upon them to settle the claim within 08 days from the date of receipt of the notice and the same was served on the Op, but in-turn the OP advised the complainant to furnish some documents and accordingly she furnished documents required by the OP.  In-spite of that, the OP has failed to settle the claim.  Hence with no option complainant filed this complaint seeking the above set out reliefs against the OP.

03.   On receipt of notice OP appeared through its counsel and filed its version.

04.   In the version OP has contended that, the complaint is not maintainable either in law or on facts and the same is liable to be dismissed.  The OP contended that, the complaint is filed without knowing the policy conditions and benefits under the above said policy.  The policy is designed to cover the medical emergencies of the insured members.  The premium paid will be invested in units as per the predetermined ratio after deducting risk premium.  Benefits are to cover the medical expenses and not to cover the life risk.  This policy covered health risk for 4 person,  Principle LA died, other three members health risks are cover will continue as per policy conditions.  When this is the policy condition, the complainant cannot make the death claim which is not there in the policy condition.  Hence it needs to be dismissed. 

04(a). The OP confirms the issue of policy as below. Policy No.364522511 table and term: 901-26.1 it is a unit linked health plus policy issued on 15.05.2009 for a term of 26 years yearly premium payable will be Rs.15,000/-.  Premium due on 05/2020 paid.  The insured persons are B.S. Sathnarayana (Principle insured) apart from the principle life assured other three members are also covered under this policy.  They are Smt. K.J. Renuka (Insured spouse), Kum. B.S. Sarika (insured child 1), Baby B.S. Sanjana (insured child 2).  On the death of the principle life assured and on intimation, expired members name will be excluded and no risk premium will be deducted from the unit value.  Second life assured is now principle life assured.  In this case wife of deceased life assured.  They need not pay further premium under this policy, but all benefits applicable as per policy conditions will continue for the remaining members.  Premium will be deducted from the available fund to the credit under this policy.  The OP submits that, since it is designed to cover the medical emergency expenses surrender of the policy is also not permissible.  However on the expiry of the term, value as on that date will be paid to the surviving member.  Main purpose of this policy is not to cover the risk of life assured, but to cover the medical expenses for the insured members.  Under this policy all the remaining 3 members are eligible for reimbursement of all benefits as mentioned in the policy conditions even after death of PI.  If no claim is made during the policy tenure whatever unit value as on the date of maturity will be paid to surviving member under this policy.  Even if any claim is made whatever value held on the date of maturity will be payable to nominee.  Since it is part of the policy condition, value held under the policy after the death of principle insured is not payable because other members are also covered for risk under this policy.  It is completely different from the other life assurance policy.  The OP do not have any intention to delay or deny claim payment to any of their customers for whenever it is due and payable.  The OP have already settled death claim under three policies amounting to Rs.4,15,699/- of the same life assured.  Since it is not there in the policy condition and privileges the OP are unable to make payment under this policy.  There is no deficiency of service on the part of the OP is concerned and the OP is not liable to pay any claim or cost as prayed.  The policy is health plus plan and it covers only the health risk, the other members of the policy can avail the benefits of the policy as per policy conditions and prays to dismiss the complaint with exemplary costs.

05.   In order to prove the case, both complainant and OP-insurance company have filed their affidavit evidence along with supporting documents and so also filed their respective written arguments.

06.   On the basis of the pleadings of the parties and the evidence placed on record, the following points will do arise for our consideration:-

(1) Whether the complainant has proved deficiency in service on the part of OP?

(2) Whether the complainant is entitled for the relief as sought for in the complaint?

(3)  What Order?

07.   Our findings on the above points are:-

             POINT Nos. (1) & (2):-     Are in the Negative

             POINT No.(3):-        As per the final order

                                           for the following :-

                             REASONS

08.     POINT NOs.(1) & (2):- These points are interlinked to each other and hence taken up together for common discussion, for the sake of convenience and to avoid repetition of reasonings.

09.    It is an undisputed fact that, the complainant is the wife of B.S. Sathynarayana, who was died on 04.03.2021 at Chennai Hospital and also during the life time of complainant’s husband he had obtained Health Plus Plan LIC bond from the opponent authority vide policy bearing No. 364522511 commenced on 15.05.2009 and expired on 15.05.2035.  Further it is also not disputed that, during his life time the complainant’s husband had paid the premium regularly till 15.05.2020 and the complainant is the nominee to the said policy.  Now the allegation of the complainant is that, after the death of her husband, she approached the opponent authority for claim settlement of the above policy on 03.08.2021 along with all the original documents, but the OP has failed to respond the complainant properly and also failed to settle the claim of the complainant even to this day. 

10.  Now the crux of the matter is to consider that, whether the complainant is entitled for the insurance claim amount under Health Plus Plan, when the Principle insured i.e., the husband of the complainant was died? 

11.  On perusal of the evidence placed on record by the complainant and OP along with documents (i.e. insurance policy) it clearly says that, it is a Health Plus policy.  The terms and conditions of the policy as per Document No.3 at Page-35 submitted by the OP under the heading of “Conditions and Privileges referred to in the policy document” it reads thus:-

          “(16) OTHER BENEFITS:

I. Death Benefits:

In the event of death of the insured under this policy the benefits payable under this policy are as below:

1.  If policy is issued on a  single life the nominee or legal heir shall get the Fund Value of units held in the Policy Fund,
2. If one or more Insured lives other than Principal Insured are also covered, on death of the Principal Insured after completion of 3 years from the date of commencement of policy, the payment of premium will cease. However, the cover shall continue for the surviving Insured lives till the maximum benefit ceasing age or till the fund is sufficient to recover the charges for hospital cash cover and surgical benefit cover, whichever is earlier.  At the end of the policy term, balance in the Policy Fund, if any, shall be refunded.  If the fund is not sufficient to recover all the charges at any time before the end of policy term, the balance amount, if any, will be refunded to the nominee/legal heir.
3. If one or more Insured lives other than Principal Insured are also covered on death of the Principal Insured before completion of 3 years from the date of commencement of policy, the nominee or legal heir shall get the Fund Value of units held in the policy fund and policy will terminate.
4. If one or more Insured lives other than Principal Insured are also covered, on death of Insured member(s), other than Principal Insured, the payment of premiums and cover for Principal Insured and other Insured members, if any, shall continue.
5. If one or more Insured lives other Principal Insured are also covered on death of all insured members the nominee or legal heir shall get the   Fund Value of units held in the Policy Fund.
6. If one or more Insured lives other than Principal Insured are also covered on death of Principal Insured and spouse( whether insured or not under the policy), if Insured Children are minor, the benefits in respect of the children shall continue and can be claimed by the eldest major child covered under the policy.  If all the children covered are minor, then benefits will be claimed by the legal guardian.

 

II. Surrender of Policies:

The surrender value, if any, is payable only after completion of the third policy anniversary.  There will be no surrender charge.  If the Principal Insured/other Insured’s (jointly, if Principal Insured is not alive) applies for surrender the policy within 3 years from the date of commencement of policy, them the Policy Fund shall be converted into monetary terms.  No charges shall be made thereafter and this monetary amount shall be payable on completion of 3 years from the date of commencement of policy.  In case of death of the Principal Insured after the date of surrender but before the completion of 3 years from the date of commencement of policy, the monetary amount payable on the completion of 3 years shall become payable to the nominee/legal heir immediately on death”.

12.   So according to the conditions and privileges of this Health Plus Policy it is only to cover the medical emergencies of the insured members and this policy is specially designed to cover the health risks only.  According to the conditions of the policy, the premium amount collected from the insured will be invested in the units as per the predetermined ratio after deducting the risk premium.  Benefits of Health Plus Policy is to cover the medical expenses and not to cover the life risk. In the above said policy No: 36452211 table and term 901-26, it is unit linked health plus policy issued on 15.05.2009 for a term of 26 years and yearly premium payable is Rs.15,000/- and the principle insured person B.S. Sathyanarayana  was died, apart for the principle insured other three members are Smt. K.J.Renuka  (Insured spouse), Kum. B.S. Sarika and Kum. B.S. Sanjana (insured children) but health risks cover will continue to these remaining three members.

13.  Furthermore in HEALTH PLUS POLICY if the death of the principle life assured and on intimation the expired member name will be excluded and no risk premium will be deducted from the unit value.  Second life assured is now principle life assured.  In this case wife of the deceased was life assured.  They need not pay further premium under this policy, but deducted from the available fund to the credit under of this policy. However on expiry of the term, value as on that date will be paid to the surviving member.  If no claim is made, during the policy tenure, whatever the unit value as on the date of maturity, will be paid to the surviving member under the above said policy.   If any claim is made whatever value held on the date of maturity will be payable to the nominee of the insured.

14.  Furthermore in the Health Plus Policy it is the part of policy condition, value held under the policy after the death of principle insured is not payable because other members are also covered for risk under this policy.  It is completely different from the other life assurance policy.

15. Furthermore in the Document No.1 letter dated: 28/10/2022 OP addressed to the complainant stating that, why he is repudiating the claim of the complainant and in the last para the OP stated that, “the spouse/major child under the policy will be treated as policy holder until policy contract is valid”. The OP does not have any intention to delay or deny the claim payment to any of their customers for whenever it is due and payable.

16.   On perusal of the evidence placed on record, it is clearly said that, Op have already settled the death claim under other three polices amounting to Rs.4,15,699/- of the same life assured.  Since it is not there in the policy condition and privileges that, the OP was unable to make payment under the above said policy.

17.   The counsel for OP has relayed the following decisions:-

(a) Viryoaxappa I. v/s The Senior Branch Manger on 19 March, 2014

(b) LIC of India Anr. v/s Raj Nandan Jha on 13 August, 2012,

(c) Life Insurance Corporation of… v/s Anil Kumar Jain on 11 Feb, 2013.

 

      On perusal of the above said decisions produced by the OP the facts involved in the above said decisions are quite different and not applicable to the present case on hand.

 

18.  It is well known fact that, insurance is a contract based on the doctrine of Uberrima Fide (Utmost good faith).  It is noteworthy to mention that, the policy in question in respect of the Health Plus Policy is not a life assured policy.  In the present case in hand is that the terms and conditions of the policy are different from the life assured policy.    This Health Plus Policy is specially designed for only to cover the health risks of the insured and his family members.  Viewing from any angle, we are of the opinion that, there was no deficiency in service on the part of the OP and there on complainant is not entitled for the relief as sought for in the complaint.  Accordingly we answered Point Nos. 1 & 2 are in the Negative.

POINT No.3:- 

19.  On the foregoing reasons assigned while answering Point Nos. (1) & (2) we proceed to pass the following:-

ORDER

01.   The complaint is dismissed.  No order as to costs.

02.   Send a copy of this order to all the parties to the proceedings.

(Dictated to the Stenographer, transcribed by him, corrected and then pronounced by us on this 20^th DAY OF JANUARY 2023)

 

 

 

   LADY MEMBER                               PRESIDENT