The National Commission has dismissed the police department’s defense, which relied on verbal instructions for discontinuing premium deductions without securing written confirmation. The issue revolves around policy lapses due to these unapproved changes.
Constable Sakinder Singh of the Punjab police acquired three Jeevan Saral with profit policies from the Life Insurance Corporation (LIC) of India on August 31, 2012. Each policy was valued at Rs 5 lakh, with a monthly premium of Rs 2,062, automatically deducted from his salary.
Singh passed away on June 18, 2014, due to illness. When his widow, Jagdeep Kaur, and children Lovepreet, Manpreet, and Sukhpreet claimed the policy benefits, they were stunned to find the policies had lapsed because premiums had not been paid since November 2012. This was perplexing since premiums were being deducted from Singh’s salary. Seeking answers, the family filed an RTI request and discovered that while the premiums for all three policies had been deducted from November 2012 to January 2014, their remittance was intentionally discontinued.
The family filed a consumer dispute with the Fatehgarh Sahib District Consumer Commission, alleging service deficiency by both the police and LIC. However, the complaint was dismissed, as the police department was deemed not to have provided any service, making the consumer complaint non-maintainable. Learn more about consumer disputes here.
The family then appealed to the Punjab State Commission. The police department reiterated its stance, arguing the claim was not maintainable under the Consumer Protection Act. They also asserted that premium collection had ceased based on Singh’s verbal instructions and that he was aware the policies had lapsed, as his salary was issued without premium deductions.
On behalf of the claimants, it was contended that Singh had given written authorization for premium deductions. Salary statements confirmed premiums were deducted from November 2012 to January 2014 but not deposited with LIC. The arbitrary cessation of deductions from February 2014 onwards, without notifying Singh, prevented him from paying the premiums directly.
LIC maintained that since the policies lapsed before the three-year mark, no surrender value was payable, and the policy could not be revived posthumously.
Also Read about INSURANCE
