Staff Correspondent

Policy lapsed as premium was not deducted from the salary of the insured person

Insurance for Rs. 1,90 lakhs taken in 2000 BEO requested to cut premium amount from insured's salary and remit it to LIC LIC writes to BEO asking him to deduct the premium BEO accused of not deducing the premium and not informing the insured about it

RAICHUR: The District Consumer Redressal Forum has asked the Life Insurance Corporation of India (LIC) to pay a policy amount of Rs. 1.90 lakhs along with a compensation of Rs. 10,000 to Kasturibai, wife and nominee of a policyholder, Siddappa Kottarki, who died two years ago.

In March, Kasturibai filed a complaint with the forum against the Block Education Officer (BEO) of Manvi and manager of LIC's Manvi branch seeking justice in respect of non-payment of policy amount of Rs. 1.90 lakh after the death of her husband.

Kottarki was a teacher at the Government Primary School in Devpur village of Manvi. He had taken four policies from the LIC, including a policy (no.662140635) with sum assured for Rs. 1.90 lakh, which was taken in February 2000. He had requested the BEO concerned to cut the premium from his salary and pay it to the LIC. The LIC wrote to the BEO in March 2000 for deduction of premium from the salary of the policyholder.

In March 2003, Kottarki died in a road accident in Bagalkot. After this, the LIC had settled the claims of three of the four policies held by the policyholder. But rejected the claim for the fourth policy on the grounds that premium was not paid.

Ms. Kasturibai said that on an inquiry with the BEO concerned, she was told that premiums were not remitted to the LIC as he had not been intimated by Kottarki to deduct the same from his salary.

She said it was the responsibility of the BEO to deduct premium from his employee and remit it to the LIC when the policyholder had intimated the same in writing. The BEO had not intimated Kottarki about non-remittance of premium.

Alleging that the employer and the LIC had neglected their duty, she said the BEO and the LIC branch manager concerned were responsible for the lapse of the policy.

After hearing arguments from both sides, forum president and judge N.H. Savalgi said lack of minimum service by the LIC deprived the nominee of the policyholder the benefits of the policy.

It was just and proper to honour the claim of the nominee of the policyholder along with a compensation of Rs.10,000.