Are you sure about your Policy? Will it support you in your needs? Have you Been Missold a Policy? Know the things to look out for when you buy a policy.
Insurance is one of the trickiest financial products. People often get misguided by agents or have a setback in understanding the policy clearly. It is so very difficult to avail an Insurance Policy which is legitimate, unbiased, and a policy which would support you as per your needs and Requirements.
But with MoneyMindz-Financial Freedom App-You can get the best Insurance Advisory and Planning on your fingertips.
General problems faced by the Consumers while taking up a policy or existing problems that a policy holder faces are as follows:
- Insurance agent neglects to mention all details of the Insurance policy.
- Insurance Agent sells you a policy which does not match your needs then you are a victim of Mis-selling.
- If an insurance agent asks you to sell your existing insurance policy with his Company stating that it does not match your needs (whether this is true or not) and then convinces you to pick up another insurance policy (may be a life endowment or a Ulip which would give him a high commission) from the same Company this is a type of mis-selling called Churning.
Why does mis-selling of life insurance policies take place?
Insurance products have tax benefits. This makes them very valuable to you and countless others in India. So when do you invest in tax saving products like life insurance? At the last minute? Insurance agents know that anything (including life insurance) bought in a hurry means that you would not pay attention to details (fine print). Just sign on the dotted line and buy the life insurance and your tax problems are taken care of.
Insurance agents get a commission for selling insurance products. Insurance agents sell insurance policies which give them a higher commission rather than a policy which caters to your needs and gives them a lower commission. Insurance agents mis-sell you a insurance policy to pocket a high commission.
Insurance agents have to sell a fixed number of insurance policies each month to achieve their target. If the agents do not achieve their targets then their managers cannot achieve the targets set by the top management.
Insurance Companies tend to look the other way to the misdeeds of their agents in order that targets are achieved. This emboldens insurance agents to mis-sell insurance policies.
Two in one benefits:
Insurance agents know to spot and exploit greed. They sell you insurance cum investment products such as endowment life policies or Ulips which have a very high premium in the initial years and fetch agents a high commission.
Never mix insurance with investments. A life insurance policy needs to cover you across your working life and a term life policy (pure insurance with no survival benefit) is a must have policy. These policies have low premiums as they have no investment benefits.
Your life is covered by the term insurance and you can invest the difference in premium (instead of a costly life endowment policy) in an equity mutual fund (if you are an aggressive investor) or a fixed deposit (if you are conservative).
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