Visit your banker and soon they would lure you to buy a scheme which works like a fixed deposit but offers better tax-free returns. You sign on the dotted lines without realizing that you are buying insurance where you have to pay the same premium every year for the next 10 years.
You receive a phone call from some number who claims to be official from some government body. They have all information about you and your previous insurance data. Also, promise you an extra bonus if your another policy from them as per the process of government. You are given such convincing documents that you get conned and agree to put your hard-earned money.
These fraudsters are present everywhere in office space, cyberspace and in referral space. They make you believe, and greed takes over. IRDA had been doing public campaigns for the last 3 years but frauds are occurring at the same speed.
In such a marketplace, the surprising element is the apathy shown by insurance companies. They are well aware of the fraudulent practices, corporate agents involved. In spite of such knowledge of recurring complaints, these companies are actively involved in the past many years. It is shocking such companies keep doing the business by changing their name and office.
As per IRDA guidelines, Insurance companies do take precautions by doing initial screening and calling, but today such preventive measures are being used as evidence against the customer rather than practitioners. One insurance complaint, then Insurance companies gives evidence that calling was done and an agreement was done. Most customers take a very casual approach to call and they agree without listening to the questions. The conversation is so mundane and investigative that the customer leaves interest. Then there is a provision of a free look from the date of receipt of the policy document. Customers consider Insurance as a simple product and avoid reading the contract which they should not do. Should they be penalized for not reading the contract and approaching the Insurance Company?
The insurance business is fiduciary in nature and needs to protect the interest of policyholders. They need to build a healthy portfolio that ensures the persistency and popularity of insurance concepts. This can be done only through proactive steps by Insurance Companies in resolving customer insurance complaints. They need to run Financial Literacy campaigns through mass media. IRDA must begin Financial Literacy programs in Schools and colleges. IRDA must also blacklist distributors who source business through call centers using fraud promises. IRDA needs to issue guidelines to banks for taking extra care in checking on the awareness that policy has not been sold as Single Premium in lieu of a fixed deposit. Surprisingly the victim of fixed deposits is old persons losing their savings to insurance policies and later realizing that their money is lost because of not utilization of the freelook period.
Insurance Samadhan is a forum to take up such cases and represent the plight to Insurance Companies, IRDA, consumer forums, and Ombudsman with a hope that resolution will be provided.