Insurance firm told to pay Rs 1.35 cr to kin of consumer who paid premium within grace period before his death
Gaurav paid his premium for March 2021 on March 31, 2021, which was within the grace period. After falling ill with Covid-19 in April 2021, he was hospitalised, and on April 28, 2021, he passed away.
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Gaurav Sharma purchased a PNB MetLife Mera Term Plan policy with a sum assured of Rs 1 crore and an annual premium of Rs 22,707.84 — to be paid monthly. (Image: Freepik/representational)The State Consumer Disputes Redressal Commission of Chandigarh has upheld the order of the District Commission which directed an insurance company to pay Rs 1.35 crore to the kin of an insured man who died due to Covid-19 in April 2021.
As per the case before the District Commission, “On June 30, 2020, Gaurav Sharma purchased a PNB MetLife Mera Term Plan policy with a sum assured of Rs 1 crore and an annual premium of Rs 22,707.84 — to be paid monthly. The policy allowed 15 days grace period for the premium payment. Gaurav paid his premium for March 2021 on March 31, 2021, which is within the grace period. Unfortunately, he fell ill with Covid-19 in April 2021, was hospitalised, and on April 28, 2021, he passed away.”
Complainants Jyotsana Sharma, Gaurav’s wife, and their son filed a claim on May 20, 2021, which was denied on June 30, 2021, citing a policy lapse due to non-payment of the renewal premium. The complainants claimed that Gaurav paid a premium within the grace period.
PNB Met Life India Insurance Company, contested the complaint, by submitting their written response, which included preliminary objections regarding maintainability, concealment of facts, and cause of action and claimed that “the complainants attempted to mislead the Commission by distorting facts”. However, they acknowledged that the deceased life assured (DLA) obtained the policy but asserted that he last paid the monthly premium on February 28, 2021.
They further claimed that the premium due on March 29, 2021, was not paid within the grace period, resulting in the policy lapsing and justified the rejection of the claim.
After hearing the counsel of both parties and going through the evidence and record of the case, the District Commission ordered the insurance company to pay the sum assured of Rs 1 crore to the complainants, along with Rs 25,000 as compensation and Rs 10,000 as costs of litigation.
PNB Met Life India Insurance Company, however, filed an appeal against the District Commission order at the State Commission.
The State Commission on hearing the matter held that the policy document explicitly indicates that the DLA elected for a monthly premium payment plan, with the last premium payment recorded as being made on February 28, 2021, a fact acknowledged by the appellants.
“We have thoroughly examined the receipt, which clearly indicates that the premium due on March 29, 2021, was paid by the deceased life assured (DLA) on March 31, 2021. This payment falls well within the stipulated grace period of 15 days. The District Commission correctly concluded that the DLA made the premium payment within the grace period with the next premium due date specified in the receipt as April 29, 2021.
Furthermore, given that the DLA passed away on April 28, 2021, it has been unequivocally established that the policy was valid and in force at the time of his death. The appellants’ repudiation of the claim, which was based solely on the assertion that the policy had lapsed, lacks sufficient justification,” said the State Commission.
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