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Offered an Interest-Free Loan Against a New Life Insurance Policy? Insurance Fraud

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Insurance scams are very common in the insurance sector. Innocent customers get calls from fake insurance agents. They try to coax you to buy an insurance policy by giving you offers that will sound too good to be true. Beware of such offers as there are more chances that it is insurance fraud. 

Offered a Loan Against Life Insurance Policy?

Here’s one of the conversations where Sunil became a victim of Insurance fraud and mis-selling:

Caller: Good morning, sir. I am calling from Personal Loan Ltd. Am I speaking with Sunil?

Sunil: Yes.

Caller: Hello Sunil, I learned from our data that you need a loan of Rs 10 lakh to start your own business. Am I right?

Sunil: Yes.

Caller: Sir, our company supports new entrepreneurs like you. We would love to give you a loan of Rs. 10 lakh. 

Sunil: That’s great! At what interest rate will I be getting this loan?

Caller: Sir, this is an interest-free loan we provide to talented entrepreneurs. You don’t need to pay the interest.

Sunil: Seriously? Please tell me how to proceed with this.

Caller: Sir to get this offer, you need to purchase a life insurance policy from XXX insurance company.

Sunil: I didn’t get it.

Caller: Sir, first you need to buy a life insurance policy of Rs.10 lakh from XXX company and pay the first premium of Rs 1 lakh. After 30 days from the premium date, the loan amount, i.e., Rs.10 lakh, will be transferred to your bank account. You have to pay the regular premium of Rs 1 lakh for 10 years. You will assign the policy to us so that our company will get the maturity or death claim.

Sunil: So that means I will get a zero-interest loan. And I can pay back the principal amount in instalments that too in 10 years?

Caller: Yes sir.

Sunil: Amazing. I would love to take a loan from your bank and get a life insurance policy.

Caller: Great! I will inform an agent of XXX company, he will help you to buy an insurance policy. After you pay the first premium instalment, your loan will be approved within 30 days. During this period, you will receive a verification call from the insurance company. Don’t inform them about the loan, if you tell them then it will delay the process of loan sanction. Please note that the insurance company is not giving the loan, but our company would give the loan on submission of the insurance policy.

Sunil: Sure! Thank you so much.

Caller: Thank you, sir.

Insurance Samadhan

Here, the fake caller mis-sold a life insurance policy to Sunil by offering him a zero-interest loan. However, an interest-free loan against an insurance policy is nothing but an insurance fraud. No company can give you such a lucrative offer. There are gangs of fake agents who trick you to buy such policies so that they can make easy money.

Hence, if you receive such offers, get alert! 

Contact the insurance company to verify the details of the agent who called you. Ask about the offer that the caller was providing you. If you have any doubt about the policy, like terms and conditions, ask immediately. 

If you have bought the insurance policy, and you feel that the policy was misrepresented, contact your insurance company within the free-look period to cancel your policy.

If you are unable to do so or you need technical help from someone to resolve your insurance problem, you can contact Insurance Samadhan. We have resolved 14500+ complaints related to insurance. We’ll be happy to assist you in resolving your complaint.

Click on the below links to read some cases resolved by Insurance Samadhan:

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Also Read:  Unsuitable Insurance Policy Mis-sold to a Customer

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Insurance Samadhan

Srishti Agrawal

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