Consumer forum directs insurance firm to pay Rs 70K to elderly widow

Tribune News Service

Chandigarh, October 20

An insurance company was fined Rs 20,000 by the District Consumer Forum for providing poor services to an elderly widow. Chief Managing Director and Regional Manager, M/s Bajaj Allianz Life Insurance Company Limited, NAC, Mani Majra, Chandigarh, were also asked to refund Rs 50,000 to the complainant.

In a complaint filed on March 27, 2011, Bhupinder Kaur of Mohali had stated that she bought a single premium policy for Rs 50,000. The payment was made through cheque for which a receipt was also issued. The certificate of insurance was received and it was to mature after nine years. 

However, on November 12, 2016, the complainant was intimated that due to non-payment of regular premium during the revival period from due date of last unpaid premium her policy was terminated. A cheque for the balance amount of Rs.4,868 was issued against the policy. Thereafter, the matter was taken up through emails but to no avail. It was alleged that the firm had no valid ground to reject or terminate the policy as it was a single premium policy. 

The insurance company stated that the membership of the complainant stands foreclosed as per the terms and conditions of the policy and an amount of Rs 4,868 was paid to her. It added that as per conditions of the certificate of insurance, in case of single premium, if the value of the unit falls below 1/10th of the single premium or became insufficient to meet the charges, membership would be foreclosed and the value of the units would be paid upon such foreclosure. 

As per the forum, the membership was terminated due to non-payment of regular premium, which does not at all apply in the present case. The forum added that it was a case of single premium payment and no other regular premiums were required to be paid. 

The forum stated that the firm made “paradoxical” statements and was of the opinion that the firm had been lacking in providing proper services. 

The forum order reads that the company employed unfair trade practice and terminated the policy of the complainant without valid grounds “particularly when she happened to be a senior citizen in the year 2011 on the date of policy and a widow.”

The forum thus directed the company to refund the deposited amount of Rs 50,000 and pay Rs 15,000 as compensation for deficiency in service, mental agony and harassment along with Rs 5,000 as costs of the litigation to the complainant.