How to Recognize Mis-Selling Tactics in Insurance Policies
Insurance is bought to protect the family and businesses against the unforeseen circumstances. When we look at a life insurance product, we need to understand the protection the product offers. The advisor will help you understand your need for protection by doing the analysis of your current standard of living, your assets and liabilities.
After the analysis, he would offer you products that will cover the gaps of risks. If the product suits your protection needs and the premium that needs to be paid, you buy the product.
Tactics Sellers may use which you need to be careful:
Tactic 1: Higher Returns
Traditional Insurance products by design cannot offer returns more than MF or FD. There are charges deducted from your premium towards expenses and risk coverage (Mortality).
Tactic 2: Flexible Premium Payment
You can stop paying premiums! Most insurance products are regular pay which means that you enter into an agreement with the Insurer that you will pay regular premiums for the number of years that you choose. Hence a withdrawal in-between is not possible. You have the option to surrender, pay up or take a loan.
Tactic 3: Single Premium Product
Please check your policy document and check when you get the call from the insurer. Single premium products also do not work like an FD, there is a maturity date given, please check if that suits you. You do not have flexibility of withdrawal anytime. If someone is committing, you can withdraw as and when you like. That’s an alert!
Tactic 4: Loan on new policy
You can get an interest free/ low interest loan if you mortgage your new insurance policy. You get a loan on your old policy based on the Surrender value it has acquired. Contact your insurance company for details.
Tactic 5: Lapsed policy and Bonus
You have money in your lapsed policy which you can withdraw by transferring the funds to a new policy. This is a fake promise!! A Lapsed policy can have surrender value and can be revived, you need to contact your insurer.
To protect yourself and your family, always listen and understand the call done by the insurer before the issuance of the policy and after the policy bond is delivered to you. This call is done to safeguard the policyholder. We tend to ignore the call and fall into the trap of fraud and mis-selling!
Policyholders can cancel the policy within the free look period of 15 days after the policy delivery and seek refund if the premium of the policy does not match the requirements.
Bottom Line
If you are also a victim of mis-selling in insurance, you must immediately contact your insurance company. If you still need help, you can contact Insurance Samadhan. We have resolved 15,000+ insurance-related complaints. These insurance complaints include claim rejection, delay in claim settlement, fraud and mis-selling in insurance.
Contact us to get Samadhan for your insurance-related issues, we’ll be happy to help you.
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By Shilpa Arora – Co-founder & COO
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