How does one know if an insurance policy is being "mis-sold” to them? Mis-selling simply means that you have not been given adequate information about the product being sold to you or the product sold to you is unsuitable for you, for example, you went to an electronic store and asked for a smart tv, a sales representative lured you into buying a model and you bought it only to find out when you reached home that it's not a smart tv.
Insurance frauds are not always committed by policyholders, Fraudulent mis-selling of insurance policies is a type of insurance fraud that is committed by insurance agents or agencies and has been prevailing in India for a decade now. Unfortunately, vulnerable people are still taken advantage of and the only way to curb this is by educating people and taking strict action against the fraudulent.
Fraudsters use attractive offers to lure gullible people into buying insurance, some of which are - interest-free loans + term insurance, no loss in claim amount, reasonable premiums (which might be a premium embezzlement), etc. Mis-selling can also mean that the policy sold to you was not explained in detail (benefits, terms and conditions,etc.) when they were sold to you.
If you are a victim of this deceit, taking necessary action against it is your responsibility. Here is a step wise procedure of how you can report a fraudulent sale of a life insurance policy.
Step 1 - Solve the theft informally (you never know, it might work)
It might seem like a long shot, but a phone call to the insurance company could make a difference and might solve your problem too. Dial your insurance company’s grievance number and explain your issue, make sure you know who you are talking to, what date did you call them and what did they reply, just in case you want to take the complaint further, this will come handy.
Step 2 - Make a formal complaint to the insurance company’s grievance redressal
Every insurance company has a grievance platform (details of which will be written on your policy document or their website), lodge a complaint with your issuer with all the necessary information/evidence you have which would strengthen your position (a recorded conversation, any document which states what the fraudster promised you) and mention that you are unhappy about the situation you are in.
The insurance company has 15 days to respond to your complaint. If they have replied and you’re not satisfied with their response, you can take your complaint further to IRDA.
PS - Make sure you document everything that you and your insurer have communicated, this will help you take your complaint further.
Step 3 - Register a complaint with IGMS (Integrated grievance management system) of IRDA.
To take your complaint further, submit a complaint with IGMS, which is the grievance redressal of IRDA. You can also track your complaints on their website with your reference number.
PS - Make sure that you have registered a complaint with your insurance company first before approaching IRDA.
Click here to file a complaint with the IGMS igms.irda.gov.in
Step 4 - Talk to an Ombudsman
An Ombudsman is an official appointed by the government who investigates the grievances of policyholders and arbitrates the dispute. You can approach an ombudsman within a year from the date of receipt of the decision of the insurer which is not to the satisfaction of your complainant
Make sure you take all your documents with you (even the ones that you have been documenting throughout the complaint with your insurer). The chances of you winning the fight with the fraudsters would be higher if you are completely transparent with the ombudsman.
If this method also does not satisfy you, don’t worry, there is another way.
Step 5 - Sue your fraudster in civil court.
Make sure you are prepared for this one, collect all the information you need, and get ready to fight this in court.
We at Insurance Samadhan, are here to help you throughout your battle against fraudsters, Register here and will fight with you!
How to avoid mis-selling of insurance?
- Read all documents carefully, do not sign anything you do not agree with or you don’t understand.
- Make sure you know everything about your policy - claim amount, premium, number of years you have to pay a premium for, product name, etc.
- The main objective of a Life insurance policy is that it’s a long term investment, with a sole purpose of protecting your family in any unforeseen event, if any insurance advisor/agent tries to sell a short term product to you, you would want to avoid that, as it would not serve any purpose to you as a life insurance policy.
- Sometimes, insurance is also sold as a by-product, for instance, you went to the bank to get a loan but you also bought an insurance policy that basically would protect your family from paying the loan when you die. This practice needs to be stopped, an insurance policy needs to be purchased separately and not as a by-product.
- If you receive a handwritten calculation of your insurance plan, that’s a red flag, every insurance company will have their standard illustration of the calculation for the life insurance product, which is what the agent must show you.
- Fill all forms and documents yourself so that you know everything about your policy.
- Know the name of the product you are investing in so that while you’re filing or signing a document, you know you bought the right product.
- If your agent does not bother about your medical tests, that’s suspicious as it would seem like all that matters to him/her is sales.
- Only work with licensed insurance agents,Ask your agent for their license number and verify them on your state’s licensing website.
- Usually, as soon as you agree to purchase a policy and submit your forms, the life insurance company would call you to make sure that you have understood the terms and conditions of the insurance product you just bought. If you think that this is not something the agent told you it would be, you have the option of forfeiting the policy.
And if you don’t receive a call from your insurance company, something is fishy.
If you’re a victim of a fraudulent sale of insurance policies, contact us and we will be right there with you!
To reach us at InsuranceSamadhan.com –
Call us at – 844 844 0626
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