The Uttar Pradesh State Consumer Disputes Redressal Commission, with Mr. Sushil Kumar (Presiding Member) and Mrs. Sudha Upadhyay (Member), determined that the ‘Life Insurance Corporation of India’ (LIC) wrongly denied a valid insurance claim. This decision stemmed from the policyholder’s failure to activate accidental coverage upon reaching adulthood by paying an additional fee. The commission concluded that since the policyholder passed away before the next premium installment was due, LIC’s repudiation of the claim was deemed unjustified.
Summary of Facts
The complainant’s minor son held a Jeevan Surbhi Policy with the Life Insurance Corporation of India (LIC), which included a guaranteed sum and an additional accidental benefit. Regular premiums were paid for the policy. Upon reaching the age of 18 in October 2022, he tragically passed away in a road accident on January 10, 2023. The complainant filed a claim with LIC, which disbursed the assured sum of Rs. 1,84,700/- but declined to pay Rs. 1,00,000/- for the accidental benefit. LIC justified its decision by stating that the son, upon becoming an adult, had not paid an additional premium amount of Rs. 1 per 1000 to activate the accidental benefit.
Feeling aggrieved, the complainant lodged a consumer complaint with the District Consumer Disputes Redressal Commission, Sultanpur, Uttar Pradesh (“District Commission”). The District Commission directed LIC to pay Rs. 50,000/- with an annual interest rate of 9%.
Unsatisfied with the District Commission’s decision, LIC appealed to the State Consumer Disputes Redressal Commission, Uttar Pradesh (“State Commission”). LIC argued that the deceased insured did not activate the accidental coverage benefit by paying an additional premium after reaching adulthood. Hence, LIC asserted that the repudiation was justified.
Findings of the State Commission
The State Commission noted that the insured individual passed away on January 10, 2023, approximately three months after reaching adulthood in October 2022. The next premium installment was scheduled for January 28, 2023. Therefore, the deceased was unable to activate a new accidental coverage option by paying an additional premium, as he passed away before this opportunity became available.
Additionally, LIC did not provide any evidence requiring the deceased insured to promptly pay the additional premium upon reaching the age of majority. Consequently, LIC’s appeal was dismissed, and the District Commission’s decision was upheld.
Posted and reproduced in Public Interest by
Adv. Sulaiman Bhimani Legal Consultant
Expert in RERA & Consumer Matters, Co-operative Scty Matters,
Deem Conveyance, Family Matters, and Property Disputes.
Human and Civil Rights Campaigner
President Citizens Justice Forum https://citizensjusticeforum.in
YouTube Channel https://tinyurl.com/CitizensJusticeForum
NEW CHANNEL FOR STOCK MARKET https://tinyurl.com/GreenWallet
WhatsApp +91 99877 43676