Recently, my 133-30 triple risk cover policy with LIC,enrolled in the year 2001 came to a lapse intimation(But lapsed). When I checked, I found 6 months/2 quarterly payments were not transferred from bank account for due date issues. Which led to the lapse intimation letter. I was shocked! The next day, I visited the branch and raised the issue with Chennai Divisional Office II, Assistant Administrative Officer. The strong question I raised was…Why LIC is also behaving like private insurance company? I had to presume that LIC too trying to vandalize policy holders and avoid claims.
Finally, they asked for spot revival since my policy is 10 years old. However, I was not satisfied the way the IRDA & LIC following insurance policies, intimation systems & policy lapse procedures. Considering the basic need of the basic need of insuring policies.
The purpose of Insurance policy is to cover the risk, when a person enrolls into a policy, the basic right and necessity of the policy is to cover the risk & investment till the maturity period. In such case, a delay in premium should be addressed well to the policy holder, they can call or send special/intimation letter for stipulated period. Further send a lapse notice to the policy holder, that IF THE POLICY IS NOT PAID WITHIN ONE COMMERCIAL YEAR, the policy would get lapse. But what is happening? if there is 6 months delay in premium, they straight forward sending a LAPSED intimation and further demanding Medical certificates. This is completely a violation of insurance regulation.
For last 11 years of insurance experience, I had a chance to insure few policies on life, motor, general & health. Some bad experiences with Max New York & ICICI prudential stopped me entertaining any agents from such private companies to discuss my insurance plans. The only insurance company, I was believing was LIC of India. With whom, I hold 2 risk cover policies, 1 health policy & 1 ULIP (Money plus). But in recent years, I had a surprising experience with LIC specially on lapsing issues.
A year back, my health policy was suppose to be renewed for 3rd consecutive year. I had issued a cheque to my agent. Unfortunately agent came up to telling that the policy got elapsed, In fact there was no intimation, as the computers in the branch was not working. very funny isn’t it ?
Unfortunately the cheque date was post dated by 2 days than the due date. This happened during the weekend. Well, the first thing, I did was to cancel the policy and requested my agent to return the funds(part of health plus is attached to ULIP).
The agent told me, only after 3rd year, we would get back the refund. Ok. thats fine. Whereas in the case of ULIP Money plus plan, my investment & NAV is less than what I have invested 5 years back. The LIC of India officers saying it very cool, it is the same with market sir, market conditions sir. (Possible, LIC invested about 7000 Crores in RIL, when the RIL shares were very high, It was skeptical move of the government.) By the way, the God & the agent only know! the hype and false commitments promoted to attract investors on these policies/plans.
LIC officers say, there are postal delays, which LIC wont have responsibility. My question is…..why don’t you cancel the agent authority if the agent is not collecting the premiums in time, LIC can very well ask the agents to follow up(call/meet in person) based on the area of the agents & policy holders.). If not you have a better communication mechanism. The number 1 insurance company in India?
Well, the point of this article is… as a fundamental & right of contract. NO POLICIES SHOULD GET LAPSED WITHOUT PRIOR INTIMATION OF LAPSE, at-least till the premium dues are not paid for one year(round 12 months). Otherwise, LIC too violating the contract by mismanaging the policies and policy holders. Mismanaging the public funds. I guess, one can go approach legally, if there are such violations in your personal policies.
Happy insurance, Have a assured risk cover!