Buy insurance to get eligible for loan – Mis-selling of the 1st order

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Insurance claim

Urvashi Kumari is in urgent need of a 20 lakh rupees loan. She receives a call from a loan agent promising her an interest-free loan. All she had to do was buying an insurance policy of limited premium payment term in which she had to pay Rs 1 lakh annual premium. Urvashi agrees. The agent mails her relevant forms and helps her fill up the details. After approval of the policy from the insurer, he sends her a payment link to make the first payment. She goes ahead with it.

Things transpired exactly the way you are thinking they may have had. The agent went missing and the loan never came.

This is one of the latest techniques through which operators are duping the gullible public. It is not just the mis-selling of the insurance policy but also the payment fraud.

Banking is not a barter system that you have to buy a loan or an insurance product to avail of banking services. Loan eligibility is a matter of a credit check from the bank’s end. Buying insurance doesn’t make you eligible for it.

Stay alert

There are no free lunches. No matter how credible the other party seems, you have to do your homework. The said loan agent convinced Urvashi to the extent that when the insurance company made a verification call, she went on record saying she bought the policy for her insurance need. The loan agent had convinced her not to mention anything about the loan.

Also Read:  How not to fall trap to Insurance Mis-selling - A Case Study

The mis-selling in the insurance industry is deep-rooted. We at Insurance Samadhan will advise you to get all the claims in writing when someone details the insurance policy features to you.  For example, Urvashi should have enquired about the firm which was extending her the loan. Had the person said it was his own firm, the terms and conditions as explained to her must have been taken in written in the letterhead of the firm.

Urvashi should have also checked about what was profitable in it for the agent. Customers are very well in a position to enquire about the commission an insurance or a loan agent is earning. They should keep their contact details handy too.

What to do now

If you figure that the policy has been mis-sold to you, you need to approach the insurance company first to lodge a complaint. The insurer is liable to reply to you within 15 days. If the response is not in your favor, you may approach the insurance ombudsman or can register your complaint with Insurance Samadhan.

Shailesh Kumar

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