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Consumer Court: Insurer Can't Keep All Premiums
4 Aug
Summary
- Insurer must refund ₹7 lakh premium despite lapsed policy.
- Death claim rejected as policy lapsed before insured's death.
- Email offered policy revival, not guaranteed cover.
In a significant consumer rights ruling, the Maharashtra State Consumer Disputes Redressal Commission has determined that insurers cannot always retain premiums from a lapsed life insurance policy. While HDFC Life Insurance Company was permitted to reject a ₹70 lakh death claim due to a policy lapse, the commission mandated a refund of the ₹7 lakh first-year premium paid by the insured.
The policy had lapsed because the second premium, due on October 3, 2016, was not paid within the grace period. The insured passed away on July 4, 2017, a day before a revival window offered by the insurer was set to expire. His widow's claim was denied as the policy was already inactive.
The commission clarified that an email offering a revival window did not reinstate the policy. It merely indicated the validity of the premium calculation for a potential revival. Since the overdue premium was not paid and IRDAI regulations were not met, the insurer was contractually not liable for the death benefit.
Consequently, HDFC Life was directed to refund the ₹7 lakh premium within 45 days, with 9% interest if delayed. The widow's claim for the full death benefit and additional compensation was rejected.
