Contract prevails over circular

An insurer cannot change the contract by issuing circular and depriving the customer of stated benefits

Deepak Rajmal Kothari had taken Life Insurance Corporation of India’s (LIC’s) Jeevan Saral Policy (with profits) from its Udhna Branch. It stipulated the maturity sum assured as Rs 2.5 million, death benefit as Rs 394,900, and accident benefit as Rs 1.5 million. The tenure was 11 years, from March 28, 2004, to March 28, 2015. The annual premium was Rs 124,100.

Over a period of 11 years, Kothari paid a total premium of Rs 1.4 million. When the policy matured, LIC did not pay the maturity amount of Rs 2.5 million. Instead paid him Rs 394,000, along with profit/loyalty of Rs