CHENNAI: After battling for over 14 years, an elderly couple will finally be able to get the insurance claim following their son’s death. Taking into consideration the long drawn legal battle, a consumer forum also directed the company to pay interest for all these years, which together add up to Rs 13 lakh.
In August 1999, B Sivakumar had taken a policy for Rs 5 lakh with Life Insurance Corporation of India, with his mother, B Rajamani, as the nominee. After paying the premium amount of Rs 6,396 for months, he got it changed to half-yearly instalments from 2000.
The next year, Sivakumar moved to the United States for work, but continued to pay the premium instalments. However, he failed to pay his due on February 2001, and that July, he died suddenly due to cardiorespiratory arrest.
When his parents, R Balakrishnan and Rajamani, wrote to LIC enquiring the procedures for claiming the insured amount, the company responded saying the policy had lapsed, leading to the legal fight.
In its defence, the company argued that the policy conditions allowed a grace period of only one month after the due date to pay premiums. If death occurs during this period, the policy is still valid. However, the counsel for the complainant stated that in many cases, the insurance company usually deducts the last instalment amount and pays the balance amount to the nominee, and cited the 2009 case between LIC and Gowramma.
“If insured failed to pay the premium, the company is required to intimate whether the policy has lapsed or not. In the instant case, there is no such intimation. Therefore it is clear the insurance company kept the policy alive as on the date of death of the insured,” argued the counsel for the complainant.
Considering the arguments, District Consumer Dispute Redressal Forum, Chennai (South), presided by S Pandian directed the company to pay the insured amount with interest.
The forum directed LIC to pay Rs 4,87,645 towards the policy amount, with interest at the rate of 12 per cent per annum from the date of complaint (2003) till the date of order (2017) which works out to Rs 8,20,638.
Besides, the forum directed the company to pay Rs 15,000 towards mental agony and hardship, and Rs 10,000 towards litigation expenses.