District Consumer Disputes Redressal Commission, Dahod, ruled that even if a life insurance policy has been issued erroneously in the name of a wrong person and premium has been charged on it, the insurance company is liable to settle the claim.
Hemi Keshabhai Patel, a resident of Fatepura in Dahod district, had approached the commission after a life insurance company turned down her claim. Her husband Keshabhai Patel had taken a policy with a sum assurance of Rs 16.56 lakh from the company to cover the risk of a loan taken from a non-banking finance company (NBFC).
Before issuing the loan of Rs 14.5 lakh, the NBFC had ensured that a life insurance policy was taken by the borrowers in a group insurance plan. While Keshabhai was the applicant, Vikesh Patel was the co-applicant.
The insurance policy with an initial sum assurance of Rs 16.56 lakh was issued in the name of Keshabhai with Hemi as its beneficiary.
The policy was issued on August 31, 2017 and the loan was given on September 13, 2017. An amount of Rs 49,999 was paid towards the insurance premium and taxes on it.
Keshabhai died on May 20, 2020. Then Hemi filed a claim with necessary documents. The claim was, however, turned down by the insurance company “as the name of the person in the proposal form was different from that in the insurance policy”.
The proposal form was filed in the name of Vikesh who was the co-applicant, but the policy was issued in the name of Keshabhai.
The birthdates in the form and documents submitted for the claim also varied – in the form, it was August 9, 1985 while that on the PAN, election card and school leaving certificate it was May 9, 1954.
The commission observed that the insurance company had itself stated that the policy was issued in the name of the loan applicant by mistake.
It said that the insurance company had collected premium and it was only at the time of the claim that that issue had come to light.
The commission then ordered that the claim of Rs 16.56 lakh should be paid to the widow with an annual interest of 6%.
It also ordered Rs 5,000 be paid to the widow towards mental agony and an equal sum was granted towards expenses made on filing the suit.
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