Pradhan Mantri Jeevan Jyoti Bima Yojana| Insurance Policy Considered To Be In Force Till Expiry Of Grace Period: Madras HC
The Madras High Court held that an insurance policy under the Life Insurance Corporation Limited Pradhan Mantri Jeevan Jyoti Bima Yojana scheme is considered to be in force till the expiry of the grace period.
The Court explained that the rules governing an insurance scheme must be interpreted and read together to ensure that provisions of the policy benefit the policyholder.
A Single Bench of Justice G.R. Swaminathan observed, “It is obvious that till the expiry of the grace period, the policy must be considered to be in force with the risk cover without any interruption as per the terms of the policy. Therefore, the policy issued in favour of the petitioner's husband must be deemed to have been in force for a period of 30 days from 31.05.2018. Since before expiry of the said period, Murugan had passed away, the claimant is entitled to the benefit available under the policy.”
Advocate K. Lenin represented the petitioner, while Standing Counsel B. Prasanna Vinoth appeared for the respondents.
The wife of the deceased policyholder had challenged the decision of the Insurance Ombudsman under Article 226 of the Constitution payment of death benefit claims under the Life Insurance Corporation Limited Pradhan Mantri Jeevan Jyoti Bima Yojana (LIC PMJJBY) scheme.
Insurance Ombudsman had rejected the claim due to the absence of a grace period for premium payment by scheme members, as per Rule 15 of the scheme's guidelines. Ombudsman argued that the grace period only applied to the designated branch office of the master policyholder for premium payment.
The Court clarified that the insurance policy was to be considered to be in force till the expiry of the grace period with the risk cover without any interruption. Since the policyholder passed away before the expiry of the policy, the claimant is entitled to the benefit available under the policy.
Consequently, the Court set aside the impugned award and directed LIC to pay the policy amount to the claimant.
Accordingly, the High Court allowed the petition.
Cause Title: M. Chellammal v. Office of the Insurance Ombudsman & Anr.
Appearance:
Petitioner: Advocate K. Lenin
Respondents: Standing Counsel B. Prasanna Vinoth
