ANITA vs BRANCH MANAGER, LIFE INSURANCE CORPORATION OF INDIA

THE husband of the petitioner/complainant took a policy called Bima Gold Policy from the respondent, L.I.C. of India for a sum of Rs. 5 lakhs. Clause 4 of the aforesaid policy reads as under: - 4. Non -forfeiture Regulations: if after at least two full years premiums have been paid and any subsequent premium be not duly paid, full death cover shall continue for a period of two years from the due date of the First Unpaid Premium (FUP). This period of 2 years from FUP shall be called Auto Cover Period. During the Auto Cover Period, the Life Assured can pay one or more instalments of premiums with interest without submission of any evidence of health. On payment of part of full arrears or premiums with interest, the Auto Cover Period of 2 years from the due date of new FUP shall again be available during the terms of the policy.

Notwithstanding what is stated above, if after at least three full years premiums have been paid in respect of this policy, any subsequent premium be not duty paid, this policy shall not be wholly void after the expiry of two years Auto Cover Period from the due date of First Unpaid Premium, but shall subsist as a paid up policy for an amount equal to the total premiums paid (excluding any extra/optional premium) less the survival benefits paid earlier, if any. This amount shall be called as Paid Up Value. This paid up value shall be payable on the date of maturity or at life Assured''s prior death. No survival benefit shall be payable under paid up policies. The policy thereafter be free from all liabilities for payment of the within mentioned premium.

The Accident Benefit Rider will cease to apply if the policy is in lapsed condition. During the Auto Cover period, the accident Benefit Rider shall not be available."

A quarterly premium which fell due on 28.12.2010 was not paid by the husband of the petitioner/complainant and it was still due at the time he died on 05.02.2011. On the death of the insured, the amount of Rs. 5 lakhs was paid to the complainant, but the benefit of the accident cover was denied. Being aggrieved from the denial of the accident benefit, the complainant approached the District Consumer Disputes Redressal Forum, seeking payment of the accidental cover amount alongwith the cost of litigation. Vide its order dated 04.06.2012, the District Forum allowed the complaint and directed payment of the amount in question to the complainant alongwith interest at the rate of 9% per annum. The complainant was also awarded 2,500/ - towards compensation for the mental and physical agony.

BEING aggrieved from the order of the District Forum, L.I.C. of India approached the State Consumer Disputes Redressal Commission, Rajasthan, by way of an appeal. Vide impugned order dated 09.04.2014, the appeal, filed by the L.I.C. of India, was allowed by the State Commission. Being aggrieved from the order of the State Commission, the complainant is before us, by way of this revision petition. It is not in dispute that the quarterly instalments which had fallen due on 28.12.2010 were not paid in time. The contention of the learned counsel for the petitioner is that there was a grace period of three months for making payment of the aforesaid instalments, but before expiry of the grace period, the husband of the petitioner/complainant died and therefore, the benefit of the accidental cover can not be given to the complainant.

A perusal of clause 4 of the policy as extracted hereinabove would show that if after payment of atleast two full years premium, there is a default in payment of any subsequent premium, the death cover continues for a further period of two years from the due date of first unpaid premium. The aforesaid period is called Auto Cover Period. Since, the husband of the complainant had paid more than two full years payment and thereafter defaulted in payment of the quarterly premium, which fell due on 28.12.2010, the policy was under Auto Cover Period at the time he died. In view of clause 4 of the policy, the complainant, who is the wife of the deceased, became entitled to the full death cover. Admittedly that amount has been paid to her. As far as the payment of accident rider benefit is concerned, it is clearly stipulated in clause 4 of the policy that during Auto Cover Period, the accidental benefit rider shall not be available. Since, the policy was in Auto Cover Period at the time the deceased died, the complainant was not entitled to claim any payment for accidental cover rider, though he would be entitled to the death cover which was payable under payment of the policy. In view of the specific terms of the policy as noted hereinabove, the District Forum was clearly not justified in allowing the complaint and granting accident benefit to the complainant. Since, we are not inclined to interfere with the impugned order on merits, no fruitful purpose would be served from condoning the delay in filing the revision petition. The applications as well as the revision petition are accordingly dismissed.