Here’s how to know whether your insurance agent is cheating you or not!

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Is your insurance agent cheating you? This is one of the biggest anxieties that plague Indians in recent times. Insurance agents nowadays are making use of several traps in order to lure potential investors. You should be able to see through any such fraudulent financial product/plan and safeguard your hard-earned money.

A whopping 75% out of the 1.68 lakh complaints that were received by the insurance regulator back in the 2012-13 period, revolved around outright cheating by insurance agents, malpractices and mis-selling. The number or percentage has only risen since then over the last few years. Here are some of the half-truths that are often told to investors by these fraudulent agents in order to get them to buy their plans-

  • Limited duration availability of insurance plans: Many agents often states that particular insurance plans will only be available for a limited period of time and will be discontinued thereafter. While multiple plans are often discontinued, they are mostly replaced by plans which higher benefits for customers and even premiums could be lower if you wait a while!
  • Commission is being distributed by IRDA: You should always know that IRDA does not ever sell insurance plans to buyers. There have such complaints brought to the attention of leading insurance companies although very little action has been taken to date.
    The premium will be matched by the bonus: This is another misleading statement. The bonus will accrue to the insurance policy in question. However, it will be paid out at the time of maturity. If you take into account the inflation rate, the bonus value will come down drastically.
  • ULIPs are the riskiest investments: Do not take the insurance agent’s word for this by all means. ULIPs can be viable if you are investing in the right manner and with proper financial advice. Be pro-active and do some homework yourself.
Also Read:  4 Common mis-selling techniques of Insurance Agents

Get Resolutions for Insurance Complaints

After these tips, you’d do well to have a few things in mind when you’re ascertaining the genuine identity of the insurance agent.

  • Always check the ID and scrutinize it to see whether it is genuine or not.
  • All insurance agents need to have the IRDA license and have to undergo training prior to clearing certification examinations. People without licenses are avoidable.
  • Do not choose the lowest premium; instead, look at the overall benefits of the policy no matter how much the agent entices you with the lowest premium ever!
  • Always ask for an illustration of the benefits and a chart showing the plan expenses, benefits and the surrender value. The agent can display maturity values which are either 6% or 10% per annum. These are only indicative and vary with the market. As a result, if the agent offers a guarantee, ask for the same in writing.
  • Ask for a clear illustration of charges on the insurance policy and contact details of the company in addition to other necessary information.
  • Check the commission structure since most agents try to sell high-premium plans in order to earn the most commissions.
  • Ask the agent to give you all details of exclusions in the policy in a written manner.

These steps may help you combat fraud by insurance agents or counter misleading claims to a large extent.

Shailesh Kumar

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