When a fraud occurs, we all pay the price – as much as the policyholder incurs a loss, it’s the insurance company that faces the brunt. That is why, it’s equally important for all of us to be aware of frauds and make sure our monies are invested in the right policies.
In India, the Insurance Regulatory and Development Authority (IRDA) has placed down stringent rules and regulations to keep a check on such frauds. So as a consumer, all you need to do is stay vigilant and read the signs of a fraud, before it happens.
To make it easy for you, here’s a list of three common frauds in the insurance industry:
Fraudsters linking themselves with IRDA
There have been several incidences where fraudulent agencies call customers under the name of well-known insurance companies telling them their claims are due. And most customers believe them as all the details these fraudsters provide regarding the policy are generally accurate. However, the catch here is that along with promising you huge claims, they also ask you to deposit a cheque into their account, in order to process the claim. Now, this is what you need to be wary of.
What you should do
The first thing you should know is that any official IRDA representatives or insurance company does not call customers regarding their insurance claim process. If you do get a call from someone claiming to be one of the two, the best thing to do is to check the credentials of the caller and ask them for an identity proof that you may cross verify. And if you find something fishy, don’t hesitate to call your insurance provider at the earliest.
Selling an incorrect policy
It is not a known practice of certain insurance agents; they advise the customers to invest their money in plans that are not what they a looking for. Most of the time, the customer is oblivious to this. In many instances, the agent even sells the customer a policy that the person may not be able to afford. The customer, who put his trust in the agent, buys the policy. All of this is just in the pursuit of earning a high commission. And very often after conning customers into buying such policies, these fraudulent agents are impossible to trace. Trying to cancel your policy in a situation like this is an option; although in most cases, this entails a heavy penalty.
What you should do
Do not sign on the dotted line without thoroughly going through the insurance policy’s terms and conditions. This will save you a lot of hassle later on. You may speak with your family members or someone who is well versed in the insurance field, in order to get a bird’s eye view on what you are investing in. Also, most insurance companies make a verification call to customers regarding the terms and conditions of their policy (not claims). Although, this may sometimes seem like a telemarketing call, be assured that it isn’t. These verification calls from your insurance provider give you a clearer idea on the type of policy you have chosen. If you find something amiss during this process, you have the freedom to cancel the policy right there. Apart from this, another great way of steering clear from frauds is to buy insurance online. Since there is no agent involved here, you have to read and understand the fine print yourself, thus reducing the chances of a fraud.
Delaying the free look period
Most insurance policies have a feature known as the free look period. This is a 15-day tenure that starts from the date of issuance of the policy. Here, you are allowed to go through the policy documents and cancel it within 15 days, if you are not convinced with the policy. There are also no cancellation charges during this period. However, most agents under some pretext dodge the customer with the policy documents until this period is over. Thus, you end up losing your privilege of choice and purchasing a policy you may not be satisfied with.
What you should do
The best thing here is to stay vigilant. If you feel that your agent is trying to dodge you, cancel the policy immediately. You may always buy that policy again, rather than being cheated.
To prevent yourself from falling prey to insurance-related frauds, keeping a watchful eye is very important. It is recommended that you buy the policy directly from a trusted insurance company.