M. PARTHASARATHY Vs. BRANCH MANAGER

JUDGEMENT

(1.) Appellant is unsuccessful complainant.

(2.) The case of the complainant in brief is that his wife took an insurance policy on 2.11.2006 for Rs. 1 lakh on yearly premium of Rs. 10,000/- payable on 2nd November every year for a period of 10 years. She made him as her nominee in the event of her death. After paying two successive premiums she died on 8.12.2008. He submitted his claim; however the insurance company repudiated the claim on the ground that the policy was in a lapsed condition as on the date of her death. He alleges the stipulation that on failure to pay the premia for a certain period policy being lapsed is unjust. It is violation of Insurance Act. It is a fraud perpetrated on the policyholders. The company has its own policy document to its advantage. Article 15 was conveniently applied in order to deny his claim. Forfeiture clause should not be allowed to continue. In fact two categories of risks are to be covered by the policy viz., 1) the investment risk and 2. the death risk. The company has disassociated itself from the investment risk by declaring that In this policy the investment risk in investment portfolio is borne by the policyholder. As far as death benefit is concerned it intended to avoid payment by introducing condition of lapsed policy viz., If any regular premium is not paid before the expiry of grace period, within three years of inception of the policy, the policy shall lapse immediately for all insurance covers. These provisions are against the Insurance Act. They are liable to be struck down. Making severe allegations against the insurance company he alleged that it was playing fraud and making money on the lives of the citizens. Such conditions are unfair and violation of Insurance Act. He claimed an amount of Rs. 1 lakh covered under the policy together with compensation of Rs. 2 lakhs and costs.

(3.) The respondent insurance company resisted the case. It alleged that admittedly the policy was issued in favour of complainants wife commencing from 2.11.2006. As per article 6.1 of the terms and conditions of the policy a grace period of not more than 30 days is allowed for payment of premium. The policy was lapsed on failure to pay premium even after expiry of grace period as per Article 12. If the policyholder is alive, she can revive the policy within two years on payment of unpaid premium. If the policyholder dies the policy shall stand automatically terminated vide article 35 of the conditions of the policy. The assured did not pay the premium due on 2.11.2008 even within a grace period of 30 days. Therefore, the policy stood lapsed. In the light of above terms and conditions the claim was repudiated by its letter Dt. 18.3.2009. The life insurance policy is a contract and the parties are bound by its conditions. The allegation that it has used the conditions tactfully and conveniently to make the claim inadmissible is baseless. The interpretation of terms and conditions of the policy by the complainant is not tenable. There is no ambiguity in the conditions of the policy, requiring new interpretation. Therefore it prayed for dismissal of the complaint with costs.