MIS -SELLING BY BANKS, TAKING CUSTOMERS FOR A RIDE
August 30, 2019
MIS- SELLING OF MUTUAL FUNDS
August 30, 2019MIS-SELLING BY INSURANCE AGENTS, BEWARE OF SMOOTH TALKING!
[Courtesy from internet]
Insurance products are aggressively sold to customers.
The initial commission that the agent gets is pretty high and Insurance company gets long term income from you. Because of these the following happen.
-They deliberately discourage taking of Term insurance by investors on which agents get very little
commission.
-Insurance agents often resort to gimmicks and outright lies to sell the products.
-Insurance Companies keep strong clauses in the policy document to prevent exit by customers. You may end up losing all or most parts of the premium paid if you exist early. If take a wrong step, you will continue with the wrong track for decades.
The loss that you incur on 30-year period may run into Rs.50lacs to One crore on account of stupid
Insurance product decision.
Hence, checking and evaluating Insurance product is essential before you write your first cheque.
-Do you really need an insurance policy?
-What are the different options?
-Which one gives the best offer in terms of coverage and least premium?
-What are the exit clauses and penalties?
Here are the few tips to spot misspelling of insurance policies
1.Selling short term policies
Basically life Insurance products are for long term . If anyone tries to sell it as for 4-5 years coverage with great investment vehicle, be on the alert! it could work out to be a risky proposition.
2.Beware of cooked up illustration
Insurance Companies have standard illustrations to describe the product. If the data is cooked up the agent, it may show fantastic returns in short run. Which is grossly untrue.
3.Do not allow agents to fill up application
Very often,agents ask you to simply put in your signature and they fill up the rest. This could work out dangerous for you.And, you will realize only after decades!
4.In Healthcare policy, make ‘honest’ declarations
To sell the healthcare policy agents often fill up wrong data. It could be false medical claim or hiding some information. If you are not honest, your claim will get rejected and agent can do nothing.
5.Do not buy another policy unnecessarily
If you call up the agent with one product he may try to push another product too .Be clear as to which policy you want and for covering what.
6.Do not fall for rewards and gifts
Do not fall prey to gifts and rewards offered by the Insurance agents. These could be baits to trap you with something bad and something big at later stage.
7.Do not entertain imposters
There are many imposters who call claiming to represent IRDAI or similar agencies. Do not entertain the calls and offers. If you wish you can call insurance company directly.
8.Single premium plans
Very Often, ULIPs are sold as single premium insurance product to senior citizens. Your insurance coverage is very little and too much amount gets adjusted as premium for coverage Net result is that ,the end returns that you get from invested money would be far less than other investment options.
9.Guaranteed return promise
Except fixed income securities, ‘guaranteed returns’ cannot be promised for any insurance or related product. Do not fall for such sales talk. Except Fixed Income products, there are no “guaranteed returns “ for any product.
10. Banks and Insurance products
Banks are for banking needs. Insurance is for personal and asset coverage. Please do not mix these two. Do not try buying any mutual fund or insurance through your Bankers. It may end up with mis sell or you may end up paying huge commission to banks on long term basis.
