Life Insurance Corporation Of India & ... vs Smt. S Sindhu

The Supreme Court held that in the case of a lapsed life insurance policy, the Life Insurance Corporation of India (LIC) is liable to pay interest on the paid-up value from the date of receipt of premiums until the date of settlement. The Court interpreted Condition No. 4 of the policy, affirming that while the policy lapsed, it could still be treated as a paid-up policy, thus entitling the claimant to interest. The Court upheld the District Forum's directive for LIC to pay interest at 15% per annum on the paid-up value of Rs. 1,13,750/- from the respective dates of premium payments to the date of settlement.