 Broadly insurance can be classified in two categories: First - Life Insurance which matures in event of death of the insured/policyholder. On occurrence of such an event the insurance company pays a sum of money assured to the nominee/beneficiary (person nominated by the policyholder). Life Insurances are of two types: Traditional Plans - which contain Endowment Plan , Cash Back Plan, Term Plan , (Term Life Insurance) and Whole life policy. And Unit-linked Insurance Plans - are of 4 types - Endowment cum Ulips, Children Plan , Retirement Plan or Pension plan and investment/saving plans. Second - General insurance. All insurance policies other than life insurance policies come under general insurance segmentation. (Also known as non-life insurance policies). These policies include Home Insurance, Auto Insurance, Travel Insurance, Marine Insurance, Theft Insurance, Office insurance and Health insurance Health insurance is most acquired policy in general insurance segment. Health insurances are of 3 types - Comprehensive Plan - which include Mediclaim and Fixed benefits plan, Accidental Insurance and Critical Care plan . |
A life insurance company cannot reject a claim filed by the family of a deceased, if his employer defaults in paying his policy's premium, the Maharashtra Consumer Commission has held.
The Commission said if the failure to make payment of premium to insurance company is on the part of the employer, then it would be the liability of the company because its agent, the employer, had failed to deduct monthly premiums and send them to it.
The Commission's observations came in connection with the case of an accident victim, Kiran Shankar Bhagwat, who had purchased a policy from Life Insurance Corporation (LIC) for which premium was payable under the Salary Saving scheme.
His employer, Tahsildar Khatav, was required to deduct a premium of Rs 486 from his monthly salary and deposit it with the insurance company.
Bhagwat, hailing from Satara district, died in an accident in February 2005. After his death, his employer failed to deposit some of the monthly premiums (deducted earlier) with LIC.
His wife Usha, in her plea, had claimed Rs three lakhs with interest as compensation. She also sought Rs 20,000 as relief for mental harassment and litigation cost from the insurance company.
The LIC rejected the claim on the grounds that it did not receive premium. It said that the policy had lapsed and argued that the deceased and the employer are to be blamed for non-payment of premiums.
The LIC told the Commission that the deceased had given an undertaking that in case of non-payment of premium to LIC within 15 days of the due date, the policy would stand lapsed.
It further said, the life assured shall be primarily liable to keep the policy in force and shall remit defaulted premium dues together with additional charges applicable for monthly payment and with interest for the delayed payment of premium.
The Commission held that since the legal heirs of the deceased were unaware about the non-payment of premiums by the employer, as the LIC had failed to intimate them about it, the LIC's plea that policy had lapsed was unsustainable.
The Commission also ordered six per cent interest along with the claim amount.
Source : Economic Times
