IMPORTANT POINT
Inactive Policy – If a policy is not active, the claim for the Accident Benefit is not payable to the complainants as per the terms outlined in the insurance contract.

ORDER

This Revision Petition has been filed under Section 58(1)(b) of the Consumer Protection Act, 2019 (the “Act”) against impugned order dated 08.07.2021, passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (‘State Commission’) in FA No.378 of 2021 wherein the State Commission dismissed the Appeal and affirmed the order dated 26.02.2021, passed by District Consumer Disputes Redressal Forum, Hassan (“District Forum”) in CC No.193 of 2019, wherein the Complaint was allowed in part.

2. As per report of the Registry, there is 2 days’ delay in filing the Revision Petition. In view of the facts and circumstances of the case, the delay is condoned.

3. For convenience, the parties are referred to as placed in the original Complaint before the District Forum.

4. Brief facts, as per the Complainants, are that the deceased, BS Soumya, took out a Jeevan Saral Policy for Rs. 1,00,000/- with an accidental death benefit of Rs. 1,00,000/- upon the persuasion of the OPs to aid their business. She diligently paid the premiums due from 23.12.2011 onwards. However, due to heavy rain and floods in June 2018, she couldn’t pay the premium for that month. Tragically, while engaging in agricultural activities using a temporary boat in flooded Igoor river, she got drowned and her body was found on 25.09.2018. The OP company paid the assured sum of Rs. 1,00,000/- with interest but denied the accidental death benefit. Despite repeated requests, they refused to pay the accidental death benefit. Alleging deficiency of service, the Complainant approached the District Forum seeking direction to the OPs to pay the accidental death benefit of Rs. 1,00,000/- along with interest on the policy of deceased BS Soumya and Rs. 25,000/- towards deficiency in service.

5. In reply, the OPs acknowledged that the deceased BS Soumya, had obtained the policy from them and Rs. 1,26,136/- was paid to the Complainant as death claim. OPs contended that as per LIC Jeevan Saral Plan, if premiums are paid for 3 years or more, the risk cover under the main plan is extended for 12 months from the date of first unpaid premium due. However, this auto cover extension does not apply to term assurance benefit rider and accidental death benefit rider. Therefore, they settled death benefit to the Complainant, who was the policy nominee. OPs denied that the policyholder was prompt in premium payments without any delay or default, stating that the premium due on 6/2018 was not paid before her death. The grace period was till 22.07.2018 and the life assured died on 25.09.2018. The settlement was done as per the policy and that the Complainants are not entitled to accident benefit/ term rider benefit.

6. The District Forum, vide order dated 26.02.2021, partly allowed the complaint and directed as under:

“Order

1. Complaint is allowed in part.

2. The OP Company is directed to settle the claim by paying a sum of Rs.1,00,000/- towards the Accident Benefit sum assured as per the terms and conditions of the policy with interest at the rate of 6% p.a. from the date of filing of this complaint to complainant No.1, within 2 months of receipt of this order.

3. It is further directed to pay a sum of Rs.15,000/- towards the deficiency of service and cost of the complaint within 2 months from the date of receipt of this order.

4. Fails to pay the same within the said time the complainant No.1 is entitled to 9% interest p.a. till its realization.”

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7. Being aggrieved by the District Forum order dated 26.02.2021, the OPs filed an Appeal and the State Commission vide order dated 08.07.2021 dismissed the Appeal with the following observations:—

“4. There is no dispute that the insurance policy obtained in the year 2011 and the insured was paying the premium regularly till 2017. It is an admitted fact that the insured had not paid the premium which is due 23.06.2018 even after the grace period of 30 days thus policy stood in lapsed condition. During t