VADODARA: If you are planning to take home loan along with insurance cover for it, make sure that you read the terms and conditions about ‘death’ scrupulously. For, the insurer could well reject the claim seeking repayment of the loan on some bizarre grounds of cause of death.
Such a case has been reported from the city where the insurance firm, which was the sister concern of the private finance company, denied the claim on the grounds that the borrower, Naresh Jethwani, had “not died of a critical illness as per their policy’s terms and conditions”.
Around five years ago, Jethwani, a 34-year-old photographer took a loan of Rs 18 lakh from the finance company to purchase his dream house on New VIP Road. Last year, he fell ill with high-grade fever and died after three days of treatment. As he died after paying the money for four years, Jethwani’s mother Nirmala approached the insurance company to pay the remaining amount of the loan.
But the claim was turned down. As a result, Nirmala had to pay three EMIs from her own savings, until she ran out of money. Adding to the family’s woes, the finance company in September last year started pressurizing her to repay the remaining amount else the house would be attached.
However, Nirmala received some relief last week when the consumer forum stayed the property attachment till a conclusion is reached.
“To secure the loan, the company literally forced him to take an insurance cover for the loan from its sister insurance firm. Jethwani was ready to take a policy from a different company as the premium was less, but he was not allowed,” argued P V Moorjani, who represented Nirmala in the forum.
Moorjani filed a case against the finance and insurance companies for turning down her claim and sought interim relief from the property attachment.
On October 20, the additional Vadodara district consumer disputes redressal forum presided by IC Shah sent a show-cause notice to both companies. But on December 4, as no one appeared on behalf of the companies, the court stayed the attachment process.