Order No. 20 dt. 23.03.2018
The petitioner’s case in a nutshell is that the petitioner Badruddin Biswas is a policy holder of Policy being No. 006556857. The said policy is a BSLI Wealth Secure Plan which is an Unit Linked Life Insurance Plan of Birla Sunlife Insurance Co. Limited. The petitioner herein was the policy holder whereas under the name of the life insured the name of Mrs. Mostnajiba Bibi. The premium paying term of the said policy was ten years paid yearly for a sum of Rs. 30,000/- and the said policy commenced on and from 27.07.2014.
The sum assured for the said policy was Rs.10,87,500/-. On 20.12.2014 the said Mostnajiba Bibi died due to cardio respiratory failure. The petitioner herein informed the O.P. No.1 personally. Thereafter, the petitioner may called to the toll free No. 1800-270-7000. The O.Ps advised the petitioner to submit all the relevant documents and papers to the office of the O.P. No.1 and collect receipt thereof. On 31.12.2015 the petitioner received a letter from the claim’s department of the O.P. Thereafter on 31.03.2016 the said opposite parties repudiated the said claim of the O.P. on the ground of breach of one of the basic principles of life insurance contract. The complainant prayed for the sum assured of Rs. 10,87,500/- together with compensation of Rs. 100000/-and litigation cost Rs. 30000/-.
The opposite parties filed their written version and all relevant documents denying all material allegations contained in the complaint. The O.P. took resort of Sec. 45 of the Insurance Act, 1938. The O.P. in their written version stated that the complainant under Clause 12 of the proposal form i.e. The Insurance History of The Life To Be Assured replied in the negative. Insurance is no doubt is a contract of utmost good faith and it requires the parties whose life is to be assured not only to disclose all material fact but also not to suppress any material facts in response to the question in the proposal form.
::POINTS FOR DISCUSSION::
- Whether the complainant is a Consumer ?
- Whether the complainant is entitled to get any relief as prayed for?
- Whether there is any deficiency in service on behalf of the O.Ps?
We take up all the points together for discussion for convenience.
It is perfectly legal to buy and hold more than one insurance policy. The beneficiary of the insured can rightfully claim from all the life insurance policies in the unfortunate event of death. We should keep in mind that multiple policies offer an extra level of protection that a single plan policy might not necessarily provide such protection.
In case of a life insurance in the event of the insured person death before the end of the policy term, his or her beneficiary will receive a pay-out is known as death benefit. This request for payment of the amount due in accordance with the terms and condition of the policy by the beneficiary is known as the death claim and the instant case in hand the complainant is the beneficiary of his deceased wife. It will not be wrong to reiterate that it is perfectly legal to buy and hold more than one life insurance policy under certain circumstances the first and foremost of the circumstance is one should disclose all material facts.
While applying for a new policy one must disclose the previously bought policies to the insurer so that they are cognizant of the existing coverage of the insured and can also help pick the right kind of policy which extends coverage in the line of the personal goal of the insured. Not doing so can result in misrepresentation which can be a ground for rejection of death claim. A Unit Linked Insurance Plan (ULIP) is a product offered by insurance companies that, unlike a pure insurance policy, gives investors both insurance and investment under a single integrated plan. Therefore, the instant policy under discussion is not like any other ordinary life insurance policy rather it is an Unit Linked Insurance Plan. In simple terms the insured puts his money in risks and in return gets both insurance and investment benefits.
The O.P. had cited numerous judgments but none of them fit with the instant case under discussion. The O.P. had extracted from the complainant by way of cross-examination that he holds 10 to 12 number of policies. As such we are of the considered view that there is no irregularity in purchasing more than one policy.
On 31.12.2015 the petitioner received a letter from the O.Ps. Thereafter they also received another letter dt. 31.03.2016 (marked Ext. 5 and 6 respectively) by which the said claim was repudiated on the ground that in the application the proposer and life assured had answered incorrectly to the question numbers 12(A) and 13 (D), on “Insurance history of the life to be insured” and “Family insurance history” under the application for insurance as the opposite party was satisfied that the replies given to the said question in the proposal for insurance were false.
On going through the documents we find that BSLI Well Secure Plan had premium allocation percentage, NAV, Units Allocated, Units Deducted and Unit Balance. Had it been a simple insurance of life, no question of NAV, Units Allocated Deducted or Balance would appear in such context. It is apparent and prima facie proved on record that it is a kind of Unit Linked Insurance Plan, it is a Non-Traditional plan without Bonus Facility for the whole life. In this plan premium needs to be paid for a limited period where the policy continues for the whole life.
The key features of Birla Sunlife Insurance – Wealth Secure Plan is that it a Whole Life Unit Linked Insurance Plan without Bonus Facility and life coverage can be selected as 100%, 150%, 200%,250% or 300% but based on what these O.Ps has launched his plan has not been discussed within the four corners of the W.V. filed by the O.P. The feature also says that whenever the Life Insured dies higher of Fund Value or the Sum Assured is paid to the nominee as death benefit and the plan terminates.
Moreover, the screenshot of the proposal form attached in page no. 8 of paragraph H(vi)of the W/V as discussed by the O.P. they have not filed any document in support of that screenshot. The O.P. has not come up with any documents to show that Birla Sunlife Insurance – Wealth Secure Plan is an insurance plan rather it is an Investment Plan and under column 7 of the proposal form dt.23.07.2014 the purpose of insurance is shown as savings. As per the documents filed by the complainant the basic sum assured is Rs.10,87,500/-and as per the terms and condition of the Birla Sun Life Insurance- Wealth Secured Plan the complainant being the beneficiary of the insured is entitled to the sum of Rs. 10,87,500/- as death benefit.
Hence, we are of the view that the O.P. with an ulterior motive tried to defraud its customer has collected the premium amount in the name of insurance and had done unfair trade practice upon the complainant. Prima Facie we find there is deficiency in service on the part of the O.P. All the three points are answered in favour of the petitioner .
Therefore, the opposite parties are jointly and severally liable to pay the basic sum assured of Rs.10,87,500/- together with compensation of Rs. 20,000/- and litigation cost of Rs. 10,000/- totaling Rs.11,17,500/-(Rupees Eleven Lakh Seventeen Thousand Five Hundred) only, within 45 days of passing of this order or else the O.Ps shall pay fine to the tune of Rs. 150 per diam from the 46th day till the payment is made in toto.
The complaint case succeeds in full.
Proper fee paid.
Hence, ordered
that Malda D.F. C.Case No. 90 of 2016 be and the same is hereby allowed on contest in full with cost.
O.Ps are directed jointly and severally to pay the basic sum assured of Rs.10,87,500/- together with compensation of Rs. 20,000/- and litigation cost of Rs.10,000/-totaling Rs.11,17,500/- (Rupees Eleven Lakh Seventeen Thousand Five Hundred) only, within 45 days of passing of this order or else the O.Ps shall pay fine to the tune of Rs. 150 per diam from the 46th day till the payment is made in toto.
A copy of the order be given to each of the parties free of cost
