Premium non-payment can get claim rejected: SC
New Delhi: 02.11 2021
An insurance claim can be rejected if the policy has lapsed on account of non-payment of premium, said the Supreme Court. It also stressed that the terms of an insurance policy have to be strictly interpreted.
The apex court observation came while setting aside an order of the National Consumer Disputes Redressal Commission (NCDRC) that ordered additional compensation in a road accident case. A bench of Justices Sanjiv Khanna and Bela M Trivedi said it is a well-settled legal position that in a contract of insurance there is a requirement of Uberrima fides, ie good faith on the part of the insured.
“It is clear that the terms of insurance policy have to be strictly construed, and it is not permissible to rewrite the contract while interpreting the terms of the policy,” the bench said.
The SC was hearing an appeal filed by the Life Insurance Corporation (LIC) against the judgement of the NCDRC that had set aside the order passed by the state commission.
In the case, the woman’s husband had taken a life insurance policy under the Jeevan Suraksha Yojana from LIC under which a sum of Rs. 3.7 lakh was assured by the company. Besides this amount, in case of death by accident an additional sum of Rs. 3.7 lakh was also assured. The insurance premium of the said policy was to be paid six-monthly. However, there was a default in payment. On March 6, 2012, the husband of the complainant met with an accident and succumbed to injuries on March 21, 2012.
“In the instant case, the policy had lapsed on October 14, 2011, and was not in force on the date of accident, ie on March 6, 2012. It was sought to be revived on March 9, 2012, after the accident in question, and that too without disclosing the fact of the accident which had taken place on March 6, 2012,” the SC said. PTI
SERIOUS LAPSE
No comments:
Post a Comment