Policy Sold With a Promise to Recover Lapsed Policy Premium- Insurance Mis-selling

There are many agents and brokers of life insurance in India. They try to help people to opt for insurance policies according to their needs. However, there are fraudulent people too, who acts as an insurance agent and try to sell insurance policies by giving lucrative offers. This sale is unsolicited and known as mis-selling in insurance.

Let me tell you how Ramesh had fallen into the trap of insurance mis-selling and lost Rs. 50,000.

Tele-caller: Good evening sir. I am calling from XYZ insurance company. You’ve bought a life insurance policy from our company.

Ramesh: Good evening. Oh yes, I have taken a life insurance policy from your company.

Tele-Caller: Sir, you forgot to pay the last two premiums and due to the failure, your policy has lapsed.

Ramesh: Policy lapsed? What is that?

Tele-Caller: Sir, if you fail to pay the premium within the grace period, your policy will lapse and the premium you have already paid, will be forfeited. I mean you can not avail any benefits of the policy and you can no longer get back the money you have already paid i.e. earlier premium money.

Ramesh: Oh God! At that time I was short of money. I thought I’ll pay later. Now, what should I do? All the premium paid was my hard-earned money. In the end, I will receive a thenga! Please help me to save my money. I am clueless. What can I do now?

Tele-Caller: Umm….Sir, don’t worry. I am calling from lapsed policy department. We help people like you.

Ramesh: Fast, tell me.

Tele-Caller: Ok. So, to get your money back, you need to buy a new life insurance policy from our company and then after 20 days, your earlier paid premium of lapsed policy will be transferred to your bank account. Your last policy number is deactivated and a new number will be created through a new policy

Ramesh: But…how is this possible? If I buy a new policy, how will that help me to get my money? How will you transfer my lapsed policy money?

Tele-Caller: Don’t worry sir. It is a policy of our company. As you are our valued customer, we’ll give you your money back. But to get the money, you need to buy a new policy. This is the only condition.

Ramesh: Ok then, I would like to buy a new life insurance policy from you.

Tele-Caller: Great decision sir. But, last time you bought through an agent, and this time you are buying direct. These agents would call you to confirm the sale so that they get their commission. Hence tell them that you are directly buying the policy for saving and tax purposes. Just agree for all questions else your money will not be credited.

Ramesh: But isn’t it a company’s policy that you mentioned earlier?

Tele-Caller: Yes, yes. It is our company’s policy. But only senior employees know about it. If you tell them, then it will take a lot of time to transfer the money. So don’t tell them.

Ramesh: Ok, sure. I won’t tell them. I just want my money back.

Here, the innocent person buys a new insurance policy and waits for 20 days to recover his money from the lapsed policy. During the first 15 days, the fake caller will call him on a regular basis and give an assurance that the amount will be transferred to the bank account. After 20 days, the policyholder will not receive any amount and will try to contact the agent (caller). The fake agent (caller) will try to avoid the calls. 

This is an example of mis-selling in insurance. Fraudulent gangs call innocent people and lure them to buy an insurance policy by giving lucrative offers. They will try to pass the first 15 days from the issuance of the policy as in the first 15 days, any policyholder can apply for policy cancellation. This period is known as the free-look period. During this period, the policyholder will also receive a call from the insurance company for verification. They will also check whether the policyholder was given any lucrative offer. However, policyholders don’t reveal anything as they were already tutored by the fake agent to conceal the offer given to them.

Get alert! If you receive a call like this, it will be a case of insurance mis-selling. Immediately report it to the police. And if you are a victim of such an insurance scam, then you can take help from Insurance Samadhan.

Insurance Samadhan has resolved 14500+ customer grievances related to insurance. If you want any guidance, then you can contact us. We’ll be happy to help you.

Click on the below links to read some cases resolved by Insurance Samadhan:

Delay in claim process

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