Protect Yourself from Insurance Mis-Selling

Insurance is something that has to be requested or asked for. One cannot forcefully sell you an insurance policy. If someone coaxes you to buy an insurance policy that you do not want, then do not buy it as you can become a victim of insurance mis-selling. Even if you sympathize with his situation, then also avoid his offer.

There are people who try to come in contact with elderly people and try to act friendly with them. Then they will tell fictitious emotional stories about their personal and professional lives and persuade the elderly to buy a financial instrument (FD, insurance, etc.). Do not believe such people and never take decisions related to investing money emotionally.

Read How a Person Can Mislead You into Buying Insurance Policies:

Mr. Malhotra is a retired senior citizen. He met a 28-year-old Pramod at the time of his morning walk. They became friends.
Pramod: Hi Sir. How are you?
Mr. Malhotra: Hi Pramod beta. Enjoying my retired life.
Pramod: That’s amazing.
Mr. Malhotra: You look depressed. How are you?
Pramod: Sir, it’s been 2 years. I haven’t yet got a promotion. I am not able to achieve my target.
Mr. Malhotra: Don’t worry beta. Work hard. You’ll be able to achieve your target.
Pramod: Yes… Sir, can you do me a favour? Please?
Mr. Malhotra: Yeah sure. But, tell me how can I help you?
Pramod: Sir, you just need to buy an FD of Rs. 5 lakh from me. Then my target will be accomplished.
Mr. Malhotra: But..
Pramod: It would really help me. Please, sir. I am the only breadwinner of my family. Sir, please help me.
Mr. Malhotra: Umm…Ok
Pramod: Great! I’ll bring the documents tomorrow. Thank you, sir.

The next day, Pramod bought two forms. Mr. Malhotra forgot to bring his spectacles and signed those forms without reading them.

Later Mr. Malhotra received a verification call from ABC insurance company and learned that Pramod mis-sold him two life insurance policies. According to the call, he had to pay premium money for 5 years. He was very angry and refused to pay any premium. He immediately called him to cancel the policy.

Mr. Malhotra: Pramod, I trusted you and signed those documents. But in reality, you sold me two insurance policies. Now I need to pay premiums too. You broke my trust.
Pramod: Sorry sir. But I believe it is a better option as it is a one-time investment with a monthly income after 5 years.
Mr. Malhotra: But he said that I need to pay premium money
Pramod: Sir there must be confusion. The future premiums are optional.
Mr. Malhotra: Still you should have informed me about it.
Pramod: Sir at that time, I was very stressed. You know about my younger sister. I need to pay for her education. My mom needs an eye operation. This promotion is really important for me.

Mr. Malhotra became emotional. He sympathized with Pramod and agreed to continue the policy.

Pramod: Sir one more thing, you will again receive a call from the company. Agree with whatever they’ll say. I guarantee you that you won’t need to pay any premium in the future.

Mr. Malhotra: Ok.

Later, they met regularly. Mr. Malhotra took help from Pramod to activate his internet banking.

3 months later, he learned another Rs. 5 lakh was debited from his account. He contacted ABC insurance company. The company informed him that he has bought an XYZ life pension plan.

He tried to contact Pramod, but his phone was switched off.

Mr. Malhotra Became a Victim of Insurance Mis-Selling and Fraud

Pramod was not an employee of a bank or insurance company. He mi-sold 3 life insurance policies to Mr. Malhotra.
Out of the three policies, two policies were mis-sold to him in the name of FD. When the fraud was discovered, Pramod emotionally convinced Mr. Malhotra to continue the policy.
The third policy was mis-sold to him without taking his consent. Under the pretext of activating internet banking, Pramod took Mr. Malhotra’s phone and paid for the third policy.

How Can He Get His Money Back?

He needs to immediately lodge a complaint at the police station against Pramod. He should contact the insurance company and explain to them about the insurance mis-selling and fraud. If he doesn’t receive a satisfactory response, then he can approach the Grievance Cell of IRDAI. He can also contact Insurance Samadhan for help.

If you are a victim of insurance mis-selling or have any problem related to your insurance, you can approach Insurance Samadhan. We have resolved 14,500+ insurance-related complaints. Contact us to get samadhan for your insurance-related issues, we’ll be happy to help you.

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

Health Claim Rejection amid Covid-19

Mis-selling in a life insurance policy