SUPREME COURT: ISSUANCE OF FIRST PREMIUM PAYMENT RECEIPT T0 INSURED WOULD PROVIDE PRESUMPTION OF POLICY ACCEPTANCE BY INSURER

The Supreme Court in the case Mrs.Bhumikaben N. Modi & Ors. Versus Life Insurance Corporation of India observed that the issuance of a receipt of the first premium payment by the insurer would provide a presumption for the acceptance of the policy by the insurer.

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The bench comprising of Justice AS Bopanna and Justice and CT Ravikumar in the case while interpreting the terms and conditions of the insurance contract, noted that the risk of the insured is deemed to be covered which being from the date of the issuance of the first premium amount receipt by the insurer.

In the present case, the respondent or Life Insurance Corporation, LIC denied the claim of the appellant's husband or insured on the ground that the policy wouldn't be deemed to come into force from the date of the issuance of the receipt which being towards the payment of the first premium amount.

The appellant contended before the court that the policy would be deemed to be commenced which being from the date of the receipt of the first premium amount payment made to the LIC.