mis-selling insurance

Insurance Policy Mis-selling

Quite often, we purchase Insurance Policies and become an easy prey of Financial Advisors/Agents who want to achieve their sales target. There is enough anecdotal evidence to suggest insurance policies are often mis-sold inspite of the guidelines laid by the IRDA Insurance Regulatory & Development Authority (IRDA) to reform and control the menace.

In order to prevent mis-selling of insurance policies through distance marketing and to protect consumer interest, the Insurance Regulatory & Development Authority (IRDA) has brought some guidelines on distance marketing of Insurance Products into effect from October 1, 2011. Click here to view the details of the guidelines.

Further, as per IRDA you can file a complaint online if you are cheated by any Insurance Agent/Financial Advisor. You can visit the IRDA website: www.irda.gov.in click on ‘online registration of policyholder complaints’ link on the right hand side. You will be redirected to IGMS or Integrated Grievance Management System to register your complaint.

As consumers of Insurance Policy we may also protect ourselves from  such sales policies by carefully following five precautionary measures:

  • Hear the opening pitch
  • See standard illustration
  • Fill the relevant Proposal Form yourself
  • Check the Product name
  • Wait for Insurer to call you

You are also entitled to take shelter of Consumer Courts for redressal of your grievances if you are facing any issues because of the Insurance Policies purchased by you. In such cases, the Hon’ble National Commission has declared ‘Merely issuing a cover note on the policy doesn’t absolve the Insurance Company of its responsibilities. They need to ensure that the policy, terms and conditions are clearly communicated to the insured, and any special conditions or warranties are clear and free of ambiguous words.  Ambiguity in the terms of the policy will be against the insurer since it drafts to the policy wording.’

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