Bombay HC Strengthens Insurance Law – Non-Forfeiture Clause Protects LIC Policyholders
Judgment dated 16.12.2025 of the High Court of Bombay in Writ Petition No.4559 of 2010 of Narendra Babarao Deshmukh Vs. Life Insurance Corporation of India and others
The petitioner is the holder of four LIC policies and nominee of individual policies of deceased petitioner nos.2 and 3
The petitioner discontinued premium payments after few years of taking policy. Thereafter, the policy automatically converted to Reduced Paid-up Policy as per Non-Forfeiture Regulations – Condition No.4 of the “Conditions and Privileges” of the policy contracts.
The petitioner approached the Insurance Ombudsman for payment of paid-up value with bonus additions before the maturity date.
The LIC contended that the reduced paid-up value is payable only at maturity or death.
The cases of the petitioner were rejected upto the National Consumer Commission.
Non-Forfeiture Regulations and Payment of Paid-Up Value before Maturity
Payment of Reduced paid-up LIC Policy before Maturity Date – Bombay HC Ruling that when the premium is discontinued, the policy does not lapse but automatically converts into a reduced paid-up policy with maturity date unchanged and benefits payable
