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Whether the legal heirs are entitled for insured amount ,when a person died during the grace period of payment of premium to his LIC POIICY, ? – yes- Payment of premiums – A grace period of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 15 days for monthly premiums. If death occurs within this period and before the payment of the premium then due, the policy will still be valid and the sum assured paid after deduction of the said premium as also unpaid premium/s falling due before the next anniversary of the policy. If the premium is not paid before the expiry of the days of grace, the policy lapses.’ 10. The aforesaid clause specifically provides that grace period of one month shall not be less than 30 days. One month can extend upto 31 days. And, therefore, in the present case, during the grace period the deceased expired. Hence, as per the aforesaid clause the policy would be valid and the heirs are entitled to the sum assured after deduction of the premium payable”.

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

Life Insurance Corporation of India

Life Insurance Corporation of India (Photo credit: Wikipedia)

NEW DELHI

REVISION PETITION No. 1338 OF 2011

(From the order dated 07.02.2011 in First Appeal No.238 of 2010 of the West Bengal State Consumer Disputes Redressal Commission, Kolkata)

Life Insurance Corporation of India

Represented by its Branch Manager

Sainthia Branch                                                                  Petitioner

P.O. & P.S. Sainthia

District Birbhum, West Bengal

versus

Ms. Rupali Mondal

Wife of Ganesh Chandra Mondal

Village Bhabanipur, P. O. Gorola                                        Respondent

District Birbhum, West Bengal

BEFORE:

HON’BLE MR.ANUPAM DASGUPTA                    PRESIDING MEMBER

For the Petitioner                                            Mr. Nikhil Jain, Advocate

For the Respondent                                         Mr. Barun Prasad,

Mr. Sanjay K. Ghosh & Mrs. Rupali Ghosh, Advocates

Pronounced on   22nd May, 2012

ORDER

ANUPAM DASGUPTA

This revision petition is directed against the order dated 07.02.2011 of the West Bengal State Consumer Disputes Redressal Commission, Kolkata (in short, ‘the State Commission’) in First Appeal no. 238 of 2010. By this order, the State Commission dismissed the appeal filed by the petitioner against the order dated 31.03.2010 of the Birbhum District Consumer Disputes Redressal Forum, Suri (in short, ‘the District Forum’) in C.F. Case no. CC/53 of 2009.

2.     The respondent in this petition was the complainant before the District Forum with the allegation of deficiency in service on the part of the petitioner/opposite party – Life Insurance Corporation of India (LIC), inasmuch as the LIC repudiated the insurance claim filed by the complainant who, as the wife of the deceased life assured (DLA), was the latter’s nominee. The DLA had obtained a life insurance policy commencing on 22.08.2007 for Rs.2 lakh with double accident benefit. The quarterly premium for the policy was Rs.3, 108/- payable by 22nd of February, May, August and November. The life assured met with an accident and died on 23.12.2008. It is not disputed that the premium payable on 22.11.2008 had not been paid and on that ground, the LIC repudiated the nominee’s claim. This led her to file a consumer complaint before the District Forum. LIC contested the complaint only on the ground that the first unpaid premium was due on 22.11.2008 and even after allowing the grace period of 30 days, as per condition no. 2 of the policy regarding payment of premium, the premium should have been paid by the midnight of 22.12.2008. In other words, at the time of the DLA’s death on 23.12.2008, the insurance policy had lapsed for non-payment of premium. As the policy had run only for one year and three months it also did not acquire any paid-up value; hence, nothing was payable to the nominee of the DLA.

3.     On appraisal of the pleadings, evidence and documents, the District Forum allowed the complaint and directed the petitioner to pay the sum of Rs.3,96,892/- to the respondent/complainant within one month, the sum being the difference between the amount of entitlement (Rs.2 lakh + 2 lakh = Rs.4 lakh – minus Rs.3,108, being the unpaid premium amount).

4.     The appeal filed by the petitioner before the State Commission was also dismissed on the ratio of the decision of this Commission’s order dated 25.07.2005 in the case of Pramila Vikram Khillare v Life Insurance Corporation of India [2006 (1) CPC].

5.     I have heard Mr. Nikhil Jain, learned counsel for the petitioner and Mr. Barun Prasad and Mr. Sanjay Kumar Ghosh, learned counsel for the respondent and considered the documents brought on record.

6.     The short point involved here is whether the grace period for payment of premium under condition 2 of the insurance policy should be taken as 30 days or 31 days. This point has been considered in detail in this Commission’s decision relied upon by the State Commission and cited above. It is useful to reproduce the relevant paragraphs of the said judgment:

9.     Further, in the present case, it is a hard case. The deceased was regularly depositing the quarterly premium. On occasion, he paid it beyond the grace period by paying interest on the amount of the premium payable. But for his death, it is apparent that he would have paid the premium. Secondly, it is not that the grace period cannot be extended by one or two days. If the LIC had taken humanitarian view, it would not have repudiated the claim.

In the present case, Clause (2) of the Policy reads thus:

‘2.      Payment of premiums – A grace period of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 15 days for monthly premiums. If death occurs within this period and before the payment of the premium then due, the policy will still be valid and the sum assured paid after deduction of the said premium as also unpaid premium/s falling due before the next anniversary of the policy. If the premium is not paid before the expiry of the days of grace, the policy lapses.’

10.     The aforesaid clause specifically provides that grace period of one month shall not be less than 30 days. One month can extend upto 31 days. And, therefore, in the present case, during the grace period the deceased expired. Hence, as per the aforesaid clause the policy would be valid and the heirs are entitled to the sum assured after deduction of the premium payable”.

7.     In this view of the matter, in this case too the grace period for payment of the premium has to be taken as 31 days, i.e., upto 23.12.2008 (mid night) in which event the insurance policy was valid and subsisting at the time and date of death of the life assured and the sum assured would, therefore, be payable after adjusting the unpaid premium.

8.     As a result, the revision petition is dismissed. The petitioner is directed to remit the payment of Rs.3, 96,892/- and cost of Rs.10, 000/- to the respondent/complainant within six weeks of the date of this order, failing which the entire amount, including the cost, shall be payable with interest @ 9% per annum from the date of this order till payment.

Sd/-

…………………………….

[Anupam Dasgupta]

satish

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