No Benefit To Disabled Dependent Till Proposer Survives: SC Urges Centre To Re-look LIC's Jeevan Aadhar Policy

The Supreme Court of India on Thursday upheld a condition in Jeevan Aadhar Policy from the Life Insurance Corporation of India that no benefit can be paid to the dependant till the proposer/life assured survives.

The bench comprising of Justice AK Sikri, Justice Ashok Bhushan and Justice S. Abdul Nazeer urged the Central Government to have a relook on this condition, taking into account the fact that there could be harsh cases where handicapped persons may need the payment on annuity or lumpsum basis even during the lifetime of their parents/guardians

Ravi Agrawal, who is himself a differently abled suffering from Cerebral Dysphagia, had filed a PIL challenging the said condition in the policy. According to him, LIC is denying the benefit of the insurance to the handicapped persons to get annuity or lumpsum amount during the lifetime of the parent/guardian of such a handicapped person, whereas the beneficiaries of other life insurance policy are getting annuity during the lifetime of the person who has taken insurance policy. He contended that this stance of LIC, violates the fundamental right of equality of the handicapped person enshrined in Article 14 of the Constitution. His plea was that the benefit of Jeevan Aadhar policy should not be deferred till the death of the assessee/life assured and it should be allowed to be utilised for the benefit of the disabled person even during the lifetime of the assessee.

The bench observed that the condition incorporated to the effect that the amount shall not be given to the handicapped persons during the lifetime of the parent/guardian/life assured is in conformity with Section 80DD(2)(b) of the Income Tax Act. The Court also said that the purpose of the policy is to secure the future of the persons suffering from disability, namely, after the death of the parent/guardian.

Stating thus, the bench was quick to add: "There could be harsh cases where handicapped persons may need the payment on annuity or lumpsum basis even during the lifetime of their parents/guardians. For example, where guardian has become very old but is still alive, though he is not able to earn any longer or he may be a person who was in service and has retired from the said service and is not having any source of income. In such cases, it may be difficult for such a parent/guardian to take care of the medical needs of his/her disabled child. Even when he/she has paid full premium, the handicapped person is not able to receive any annuity only because the parent/guardian of such handicapped person is still alive. There may be many other such situations."

Urging the Union Government to have a relook at this policy, the bench said: "However, it is for the Legislature to take care of these aspects and to provide suitable provision by making necessary amendments in Section 80DD of the Act. In fact, the Chief Commissioner for Persons with Disabilities has also felt that like other policy holders, Jeevan Aadhar policy should also be allowed to mature after 55 years of age of the proposer and the annuity amount should be disbursed through the LLCs or National Trust." 

Read Judgment