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Saturday, 7 May 2016

Seven ways to identify life insurance mis-selling

Realizing the growing mis-selling of life insurance products in the insurance space, Insurance Regulatory and Development Authority of India (IRDAI) has introduced guidelines to check the menace. Continued efforts in this regard have certainly reduced the cases of life insurance mis-selling.

Below are a few tips to spot mis-selling of life insurance policies:

Hear the opening pitch
Life insurance is a long-term product and selling a long-term product is more difficult. Some insurance agents often approach you with a short-term insurance policy. If your agent says he has a good short-term savings product of around four to five years, which also gives insurance coverage, then buying a policy from him might be a risky proposition; please note that life insurance is not meant to provide short-term benefits.

Check the standard illustration
Each insurance company has a standard calculation of the plan to avoid any misguidance. So, ask your insurance agent to give you the insurer’s standard illustration of your selected policy instead of a handwritten calculation.

Fill the application yourself
Most insurance agents ask you to sign at the relevant places and fill the form for you. But, it may lead to more ambiguities. Read all the details carefully and get complete awareness of documents you are going to sign.

Check the medical requirements
Some agents skip offering medical details because if there is a medical issue, the insurer will have follow-up questions that result in buying delays. Therefore, check whether there is any need for your medical details while buying a life insurance policy. Agents are not really bothered about the claim part, but knowing the medical history of a policyholder is one of the most important factors toward ensuring a successful claim settlement.

Check the policy name
Sometimes, you may contact an agent to buy a particular product and end up buying another one after hearing the agent’s pitch. To avoid getting into such a situation, check the need of your insurance coverage and policy name while filing the document.

Don’t get lured by rewards; delve deeper into the details and take a call
Some agents try to lure you with a few unrealistic rewards to make the plan appear more attractive. Evaluate the policy on the website or ask for the brochure of the plan.

Wait for insurer to call
Most insurance companies make a call to a policyholder to ensure that the policy holder understood all the terms of the plan. If you do not get a call from an insurer, take initiative and call their customer service number. There have also been cases of impostors calling up on behalf of the Insurance Regulatory and Development Authority of India (IRDAI). Please note that IRDAI does not call individual policyholder to offer any help.

Source: Indiainfoline.

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