Supreme Court Clarifies Insurance Policy Dilemma: Specifies Effective Date for Suicide Cases
Case Title: Reliance Life Insurance Company Ltd. & Anr v. Jaya Wadhwani
Case No.: SLP(Civil) No.10954 of 2019
Decided On: 03.01.2024
Coram: Hon’ble Mr. Justice Vikram Nath and Hon’ble Mr. Justice Rajesh Bindal
Facts of the Case:
The impact of an insurance policy’s expiration date on a suicide claim was a recurrent issue in two appeals that the Supreme Court heard. In one case, the court discovered that the lower forums had overlooked the reinstatement issue. In a another instance, the court made it clear that what matters is the date of policy issuance—not the proposal or receipt date. The court dismissed claims based on suicide within a year, citing pertinent sections, as it was covered by the insurance. Based on prior rulings, the court overturned the lower decisions, dismissing the allegations and permitting the appeals without incurring any fees.
Legal Provisions
The relevant legal provision in this matter relates to Clause 9 of the Policy’s conditions and privileges, which deals with suicide in particular. According to clause 9, if the life assured commits suicide within a year of the policy’s issuance date or any subsequent reinstatement date, the insurance company will not pay any claims on death. The main point of contention in the appeals is how this phrase should be interpreted and used with respect to the dates of insurance issue and reinstatement.
Issues
The main concern is whether the policy’s 12-month grace period—during which the insurance company is not responsible for suicide claims—should be computed from the policy’s issue date, its stated beginning date, or its reinstatement date if it expired. Based on the text of the policy and whether the lower forums erred in omitting to take the reinstatement component into account, the court must decide which is the proper beginning point for this time.
Court’s analysis and decision
Two appeals against orders from consumer dispute forums were examined by the court. The main challenge was figuring out when an insurance policy covering suicide claims went into effect—that is, when it was issued, when it started, or when it was reinstated. The court stressed that the 12-month suicide clause should be computed from the date of policy issue or reinstatement, finding that lower forums erred by failing to take the reinstatement factor into account. Drawing from prior decisions, the court dismissed the contested orders, dismissing the allegations and permitting the appeals. There were no expenses given.
“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”
Written by- Aastha Ganesh Tiwari