Appeared on Apna

Wednesday, September 10, 2014

Fear being mis-sold a policy? Here is what you can do to avoid it

30 year old Mr. Sharma has been looking for a good pension plan that gives him the benefit of insurance cover plus pension benefits after he retires. Not very internet savvy, he has been looking for a trustworthy financial advisor who can help him figure out a plan that suffices his needs. He has been approached by many agents who promise lucrative returns. For the lack of a good advice and awareness, he is likely to get duped for a policy that is a misfit to him.

His plight is shared by many others who, in an attempt to get a good insurance plan, get taken advantage of by few agents who misguide and mis-sell a product to them. Insurance sector has been reeling with the menace of fraud and mis-selling, in spite of implementation of measures to curb this peril.

Major part of it is due to lack of awareness among consumers which gives way to agents who push products that yield them higher commissions or frontline compensation. While IRDA, from time to time, keeps regulating the sector, consumers can play a significant part in leveling their awareness that can prevent insurance related frauds.

Some basic awareness can help buyers evade such frauds at first step itself and not buy what agents promote.  When approached by an agent, ask for to see his agent license for a proof of his authenticity. A detailed illustration of benefits, provided by the insurer is a must. Any illustration with a hint of higher bonus in shorter time should ring a bell of a possible fraud.

Internet savvy consumers can take advantage of online aggregators which have an array of plans mentioned under one platform. They can visit insurer’s website to zero down on a plan that best suits their needs. An estimation of liabilities and responsibilities, also explained on insurer’s website, will give more clarity on the kind of policy required. Policy purchased online is cheaper, convenient and much transparent as consumers directly interface with insurers. Facilities like online chats, 24×7 call center and documentation process explained, make it all the more easy.

Company policy disclosures contain the most comprehensive information with clauses like ‘free-look’, using which buyers can return the policy within 15 days of purchase. Buyers should read these documents carefully and understand it till the last word.  It is advised by consumers to offer every correct detail during the verification call given by the insurer.

Falling prey to a policy which is mis-sold can result in a huge loss of money for almost no gains. Insurers provide policies through several distribution channels like banks, agents and online (directly through their website). Choose your medium wisely and plan your investments at the beginning of the financial year to avoid any hasty decisions made in a last minute rush.

Guest Contribution by  Amit Kumar Roy, Chief Agency Officer, AEGON Religare Life Insurance


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