Kathmandu. Based on the fact that the insurance proposal submitted on behalf of the insured has been accepted, the Insurance Authority of Nepal (NIA) has awarded an insurance claim of Rs. 10 lakhs based on the basic principle of the contract.
Bhishan Raut Gaderi, 52, who had purchased child term life insurance for his son, died suddenly due to chest pain. Gaderi had proposed the insurance scheme to his minor son Manmohan Sarkar on February 29, 2017. After 3 years of insurance, the proposer passed away on January 17, 2020. Union Life refused to pay the claim citing that the contract did not include additional features related to premium waiver (PWB) and monthly income benefit (MIB).
After failing to receive the claim, the deceased’s wife Sangita Devi Gaderi filed an application on October 19, 2021. The authority sought a written response from Union Life to begin a preliminary hearing on the petition. In response, Union Life filed a written reply on November 30, 2021 arguing that the contract of the insurance policy does not include additional facilities related to PWB and MIB and that the insured has not received any premium from it.
Decision of the Authority:
On October 12, 2012, NEA settled the case in favor of the insured and ordered that the insurance claim of Rs. 1 million from Union Life Insurance was provided to the insured. While delivering the verdict, the authority based these facts, evidence and arguments.
1. If you have to fill up the proposal form made by the insured prior to issuance of the insurance policy only for the insurance plan related to children, would you like to avail the insurance premium waiver facility in case of your death or permanent disability due to accident or complete disability due to accident? In the query asked, it was found that the TAG_OPEN_strong_50 proposer had mentioned that he would like to maintain the sum insured at Rs. 10 lakhs.
2. Would you like to avail insurance premium waiver benefit and monthly income benefit in case of death or permanent disability due to accident or complete disability due to accident? In the question, it was again seen that TAG_OPEN_strong_49 the proposer wanted to keep the insured at Rs. 10 lakhs.
3. In response to the question as per the demand, the proposer mentioned “want” and the insurer could not prove the reason for not charging the insurance premium.
4. The insurer has also issued a supplementary contract to provide waiver of insurance premium and monthly income facility in case of death of the insured and proposer due to accident or total disability.
5. According to Section 27 of the Insurance Act, 1992, the insurance premium should be paid before taking the risk. Regarding the contention of the insurer that the claim is not required to pay the claim as the insurance premium waiver and the monthly income facility is not received in the present claim, the provision of the Insurance Act seems to make it mandatory for the insurer not to accept the risk and not to issue the insurance policy without charging the insurance premium.
6. The insurer is not exempt from the contractual liability {{TAG_OPEN_strong_46} {{} as in the present claim, as in the present claim, “due to the TAG_OPEN_strong_47 denial of the provision proposed in the proposal form, the insured is not exempted from the contractual liability {{{} } . “
As per Section 8 (d1) of the Insurance Act, 2049 and Sub-section (4) of Section 17 of the Insurance Act, 2049, the insurer Union Life Insurance Company Limited shall be provided with the facility as demanded by charging a fee for the facility as per Section TAG_OPEN_strong_44 8 (d1) of the Insurance Act, 2049 and Sub-section (4) of Section 17 of the Insurance Act, 2049 (TAG_CLOSE_strong_ 44}} The order is liable to be issued.
Insured’s claim:
1) Opt for additional feature in insurance proposal
2) The insurer has issued a supplementary contract
Claim of the insurer (insurance company):
}
1) The proposer is 52 years of age
2) No additional facility in the insurance policy
3) No additional fee for additional facilities
Authority’s Decision Basis:
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1) The insured party has proposed that he would like to take PWB and MIB facility in the insurance proposal
2) The insurer has accepted the offer received from the insured as it is
3. On the basis of the proposal, the insurer has issued a supplementary contract for PWB and MIB facility
In this way, due to a mistake on the part of the insured, the insured party will be able to pay additional premium for additional facilities even after the death of the proposer and pay a sum assured equal to the sum assured. The legal way to receive the payment of Rs 10 lakh was opened. The summary of this judgment is included in the seventh edition of the judgment compilation published by the Authority.
