Background: A child's education is a responsibility and a duty for every conscientious parent. The cost of education is high, and parents have to budget for this expense. The Life Insurance Corporation (LIC) has a Bal Vidya policy whose objective is to help parents meet the increasing costs of education.
Case Study: Darshak Mahesh Shah had taken LIC's Bal Vidya policy (without profit) for the education expenses of his son, Dhrumil. The policy, with a sum insured of Rs 1 lakh, was taken on July 15, 2002, benefits under which were to become available from July 15, 2006 onwards , and continue for 18 years till July 15, 2024. An amount of 1% of the sum insured would be paid every month from July 15, 2006 to June 15, 2010; then 2% of the sum insured would be paid monthly from July 15, 2010 to June 15, 2018, and finally 4% of the sum insured would be paid every month for the last six years from July 15, 2018 to June 15, 2024.
Instead of paying 2% from July 15, 2010 onwards as per policy terms, LIC continued to remit payment at 1%. Shah immediately noticed the payment was not proper and returned the cheques for correction.
LIC claimed that the payment was correct, though not in accordance with the policy, as there had been a mistake in the dates while issuing the policy. LIC claimedthe policy ought to have been issued with 1% payable for the first four years, then at 2% for the next eight years, and finally at 4% for the last five years. Shah was asked to return the policy for the correction to be made. But he refused to do so, contending that the policy had been checked, examined and counter checked while issuing it, and terms could not be varied after 8 years of issue. He also said that by manipulating the period, the total benefit would be Rs4,92,000 instead of Rs 5,28,000. Since LIC was adamant , Shah approached the Insurance Ombudsman, who took up the matter with LIC, and then sent a cryptic reply that the grievance would not be processed as LIC's response was found to be satisfactory. The Ombudsman did not hear the grievance, nor cared to communicate LIC's response.
Shah, along with the Consumer Welfare Association, filed a complaint before the South Mumbai Consumer Forum. LIC contested the case, saying Shah was trying to take undue advantage of a typing mistake. Shah claimed that LIC can not unilaterally revise policy terms after eight years.
The Forum considered the SC judgment in United India Insurance Co Ltd v/s M K J Corporation , where it was held that the fundamental principle of insurance law requires utmost good faith to be observed by the insured and the insurance firm forbidding either party from concealment or non-disclosure . After completion of the contract , no material alteration can be made in its terms except by mutual consent. The materiality of a fact is judged by circumstances existing at the time when the contract is concluded.
The Forum accordingly held that after the contract was concluded, the terms could not be varied on the basis of an internal circular, and that too one which was issued after the policy commenced. The Forum ruled that unilateral change in policy terms without consent of the insured was illegal and constituted a deficiency in service.
The Forum directed LIC to make payment as per terms of the policy issued to Shah. Since the dispute took place on July 15, 2010, it also directed that payment in accordance with the policy terms would have to be made along with 9% interest from the due date of each instalment till actual payment. It also ordered LIC to pay Shah Rs 5,000 as compensation of Rs 5,000 and Rs 3,000 as costs. Conclusion: LIC makes short payment without intimation, taking advantage of the trust reposed by unsuspecting consumers . Consumers must check that they get benefits in accordance with the terms of contract embodied in the contract of insurance.
(The author is a consumer activist and has won the Govt. of India's National Youth Award for Consumer Protection. His e-mail is jehangir.gai.articles@hotmail.com)
Anda sedang membaca artikel tentang
Insurance firm pays for violating policy terms
Dengan url
http://cegahkeropostulang.blogspot.com/2014/04/insurance-firm-pays-for-violating.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Insurance firm pays for violating policy terms
namun jangan lupa untuk meletakkan link
Insurance firm pays for violating policy terms
sebagai sumbernya
0 komentar:
Posting Komentar