What to do if you have been mis-sold an Insurance Product

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Clients who go to the bank regularly for normal transactions often have to deal with the trouble of facing an insurance sales person. The insurance sales agent would try his level best to sell the insurance policies to the clients of the bank. It might even happen that the customer may not properly understand all the terms on the policies.

For many people, purchasing an insurance policy is considered to be a difficult task. These policies contain an amalgamation of investments and insurances making them quite complex. Policies are often mis-sold by the insurance companies. Because of the variety of their offerings, the unsuspicious customers do not sometimes understand all the terms in the policy and it is usually too late when they realise that the policy sold to them by the sales agent is not what they initially understood that to be.  There are however certain regulations for the sector to protect the insurance buyers in case it has been mis-sold to them. You can always choose to reject he policy. To do this, you will be required to study the policy documents mailed to you after you purchase the plan. Then you can opt to return the policy to the insurance company if you feel that it does not fit your requirement. This however should be done within the free look period which is usually 15 days. The insurance company is compelled to accept the returned policy as they do not have any other options. Then you will get an appropriate refund of the premium amount paid by you from the company but before that the insurer will make small deductions. If you had to undergo any medical examination before the policy was sold to you, then the deductible amount would include its expenses along with other stamp duty charges sustained. The insurer can choose to repurchase the units of a unit linked insurance policy (ULIP) at the same price on the date of cancellation.  

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However, if the free look period is over, then you will have to look for other options that include the following:-

  • You can choose to let the policy lapse- if the policy holder stops paying the premium before completion of the term which is usually 3 years, the policy will lapse.
  • You can surrender the policy- if you stop paying the premium and cancel the policy contract before the specified date, your policy will be surrendered. For traditional policies to become eligible for surrender, you have to pay the premium for 3 years to acquire the surrender value.
  • You can make it a paid up policy- after you have paid the premium for the period specified which I usually 3 years and thereafter stop paying the subsequent premiums, the assured sum gets reduced to the paid up value of the policy.
  • You can take a loan against the policy- you can take a loan from the insurance company against the cash value against the cash value that has assembled in the policy. This will prevent the loss of funds that can happen if you surrender the policy.

Shailesh Kumar


  1. i was mis sold health insurance . I have never claimed . I have lost appx 25 K at least

    • Dear Andrew,

      Thank you so much for reaching out about this— We are sorry to hear that you’re having trouble.
      You can reach out to us by clicking the link below👇


      Please fill the form and our executive will call you shortly.

      Thank you
      Team Insurance Samadhan

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