Page 43 - Insurance Times February 2016

LEGAL
Legal Case Studies - Ombudsman decisions
on Life Insurance - Death Claims
Complaint No. LI - 1811 (2013 - 2014)
Complainant: Shri Ajay Patil
V/s
Respondent: Life Insurance Corporation of
India
The deceased, Smt. Deepa Patil had taken Limited Payment
Endowment Assurance plan from Life Insurance Corpora-
tion of India, Policy no. being 991442333 with date of com-
mencement of risk being 12.01.2012 for a sum assured of
Rs. 1 lakh. She expired on 26.11.2012 i.e. within 10 months
and 14 days from the date of commencement of risk.
When her husband, Shri Ajay Patil preferred the claim to
LIC of India for settlement of the death benefit under the
policy, it was repudiated on the grounds of suppression of
material facts regarding her income in the proposal form.
LIC in their reply to the complainant dated 09.04.2013
stated that their investigations revealed that the deceased
life assured was not having any income of her own at the
time of the issuance of the policy. However, according to
the claimant it was stated in the policy document that Smt.
Deepa Patil had income of her own.
Investigations also established that Smt. Deepa Patil had
another life insurance policy with LIC which was settled.
According to the LIC, there was no reflection of the second
policy in the policy document.
It was observed from the documents submitted to the fo-
rum that policy no. 991442333 was issued to Smt. Deepa
Patil under Non-Medical Scheme. LIC of India during the
course of their investigation into the bonafides of the claim grounds that policy was in lapsed condition as on date of
have found that Smt. Deepa Patil was house wife and did
not had income of her own as disclosed by the husband and
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father-in-law of the deceased life assured to the Investigat-
ing Officer of LIC.
As per the underwriting rules of LIC, if the life to be assured
is housewife without any income of her own, she is given
insurance equal to husband's insurance. Thus in case of Smt.
Deepa Patil if she would have truthfully disclosed about her
income, LIC would not have issues issuing policy to her at
all as per their underwriting rules.
Contracts of Insurance are contracts of Utmost Good Faith
and it is the duty of an applicant to disclose correct and
complete information about material facts affecting the
risk. Failure to comply with this duty entitles the insurer to
deny liability because the insurer's consensus was obtained
by improper means i.e. by withholding information. In view
of the above, LIC cannot be faulted for denying the policy
monies to the claimant Shri Ajay Patil and there is no rea-
son to intervene in the decision of repudiation by LIC.
Complaint No. LI - 821(12-13)
Complainant: Smt. Pramila Shinde
V/s
Respondent: Life Insurance Corporation of India
Mr. Daulat Shinde had taken policy no. 962851380 on
8.11.2010 for sum assured of Rs.1,50,000/- wherein he had
availed of monthly ECS of Rs. 612/- . The ECS debit date
was 28th of every month. Premium due 05/2012 was not
debited from his account as the balance was insufficient.
He expired on 18.06.2012. When his wife Mrs. Pramila
Shinde lodged the claim with LIC, it was rejected on the
death. She requested LIC to reconsider her claim, but LIC
stood by their earlier decision of rejection of claim.
The Insurance Times, February 2016 43