Legal Consequence of the Cessation of the Life Insurance Premiums Payment by the Insured (A Case Study of Molly Situwanda and Panin Dai-Ichi Life)

Abstract

Human life in the modern era, makes humans often encounter risks in all aspects of their lives. In an effort to reduce the risks that will be faced, there is a method known as insurance. Insurance basically is an agreement between two parties, which is the insurer and the insured. Insurance agreement is an agreement where the insurer commited to bear a risk that will be faced by the insured, and the insured obliged to pay insurance premium to the insurer. Life Insurance is one of the most common insurance that society posses nowadays, that's because the life insurance give a protection to the insured family if one day the insured passed away. In the modern day, many cases happens where the insured failed to pay the life insurance premium to the insurer. In this condition will came a legal consequence to the both parties. The consequence appear because in this situation, the insured has breach the agreement. This thing happens because the insured has failed to pay the insurance premium. Which in the agreement, the insured has the obligation to pay the life insurance premiums to the insured for the risk transfer that the insured commited to take from the insurer. The legal consequence that appears because of this problem are that the agreement in considered to be over and the insured has lost all the benefits that they should have from the life insurance program, including the rights to claim to coverage fund.