TomorrowMakers ™

Insurance Basics

5 signs your agent is lying to you (and what to do if they are)

01 September 2015
All insurance policies are available to everyone (subject to underwriting decisions). There are no special policies, so if you’re being told you’re being given preference, don’t take it at its face value.
 

For far too long, the mis-selling and misrepresentation of insurance policies has been a tough challenge for both investors and insurers alike, making the former more and more weary of buying insurance from the latter.

There have been numerous attempts to protect the interests of investors, as is evidenced by the recent Insurance Laws (Amendment) Bill 2015, passed by the Rajya Sabha, which holds insurance companies responsible for mis-selling by its agents. This law has created provisions for levying penalties ranging from %u20B91 crore to %u20B925 crores for various violations, including mis-selling and misrepresentation.

Though the days of caveat emptor (buyers beware) are behind us, with companies being held more and more accountable, it is still prudent to learn a few ways to protect yourself from fraudulent selling. Here are 5 suspicious sentences that should alert you to think twice and ask again before you commit.

  • This is a short-term life insurance plan.”
    Life insurance is a long-term commitment with long-term benefits. If anyone tells you that insurance is a short-term plan or a way to make a quick buck, you should know that this is a farce.
  • Simply sign this document. I’ll fill out your form later.”
    Giving an advisor a signed form without reading it is like handing them a blank cheque. If your advisor is persistent about not wanting to ‘inconvenience’ you with the details, be careful. It is better to fill the insurance form yourself not only so you can provide accurate information, but so you can know exactly what you’re signing up for.
  • “This policy is special, and not available to everyone.”
    All insurance policies are available to everyone (subject to underwriting decisions). There are no special policies, so if you’re being told you’re being given preference, don’t take it at its face value. Investigate what you’ve done to deserve this status, and don’t accept it until you are a hundred percent convinced.

“I’ve done the calculations for you.”
Insurance companies have standard illustrations for depicting expected returns from endowment or ULIP 

  • policies. Ask for these official illustrations in case your agent shows you handwritten or back-of-the-envelope calculations. Though these may seem more personal, they can be misleading or inaccurate, both of which are equally damaging.
     
  • “No, there shall be no phone calls.”
    Life insurance companies generally reach out to policyholders to explain the terms of the policy and to check if the buyer is satisfied with the purchase experience. Along with this, there’s usually 1-2 stages of phone call verification. If you aren’t receiving these regular check-ins, it’s possible your policy isn’t as official as it should be.

 

Mis-selling can have a long-term impact on the financial future of you and your family. Always do enough research about your policy before you buy it- whether it’s online searching or just reaching out to trusted family and friends. To simplify the overall process,buy an insurance policy online, and above all, remember to read between the lines.

 
 
 

Tax Singh

"Tax Fact 6"

POLL

 

MOST VIEWED CONTENT

Understanding how student travel insurance works
Insurance Basics

Understanding how student travel insurance works

Given the high cost of medical expenses in developed nations, having appropriate insurance cover is a must for students travelling abroad for education and exploration alike.

Common mistakes while purchasing insurance
Insurance Basics

Common mistakes while purchasing insurance

KS Gopalakrishnan, MD & CEO, Aegon Life Insurance talks on 'What mistakes do consumers commonly make when purchasing Insurance plans'.

Life insurance types simplified
Insurance Basics

Life insurance types simplified

Broadly speaking, there are only two types of life insurance policies – ones that offer only a death benefit (Term insurance) and others that offer death + maturity or investment benefit (e.g. Endowment Plans or Unit Liked Insurance Plans).

Travel insurance exclusions in India
Insurance Basics

Travel insurance exclusions in India

No insurance policy offers absolute coverage. All travel insurance plans exclude specific events and risks from coverage. You should know these exclusions to avoid complications when filing claims on your travel policy.

6 compelling reasons why you need Home Insurance
Insurance Basics

6 compelling reasons why you need Home Insurance

A home is more than 4 walls and carefully picked out paint. It’s about security, comfort and love. And home insurance is the best way to mitigate any damage that may be caused to it.

Regulations in life insurance industry
Insurance Basics

Regulations in life insurance industry

KS Gopalakrishnan, MD & CEO, Aegon Life Insurance talks on regulations in Life Insurance Industry in India

Market Instability & ULIPs in India
Insurance Basics

Market Instability & ULIPs in India

KS Gopalakrishnan, MD & CEO, Aegon Life Insurance talks on Market Instability & Unit Linked Insurance Plans in India

boy

We would love to hear from you!

Question, comment or concern? Our contact form is the best way to get in touch. We will respond to you within 5 working days.

NEWSLETTER