Skip to main content

How Not to Fall Prey to Mis-Selling

 

How Not to Fall Prey to Mis-Selling

 

 

Despite customer-friendly regulations, complaints about unfair business practices are on the rise

 

IN 2010, the Insurance Regulatory and Development Authority (Irda) began introducing several measures to rein in mis-selling. It was hoped that over a period of time the instances of malpractice would fall. However, this hasn't been the case. Recent data, submitted by Irda to the Finance Ministry, reveals that complaints from policyholders, particularly about `false promises', have increased over the past three years. The complaints related to `unfair business practices' have also spiked. As many as 48,721 complaints have been filed under this head between April 1 and July 20. The complaints have jumped from 1.68 lakh in 2012-13 to 2.11 lakh in 2013-14. In 2011, this figure stood at just over a lakh. While the rise can be partly attributed to an increase in awareness among policyholders about their rights, it is a cause for concern.

BE AWARE OF TACTICS

Understanding a product's working is the perfect antidote to false promises. For instance, always insist on going through policy documents before pu policy documents before purchasing a single premium policy instead of taking the agent's word for it. Selling wrong policies through misrepresentation is one of the major reasons for complaints. This is especially true for pension policies with a `one-time premium', which often turn out to be policies that actually require an yearly payment of premium. If the premium is not paid annually, the insured loses the initial premium as the policy lapses. While signing an insurance contract, you must scrutinise its features and ascertain if they match up with the insurer's verbal promises. At least, make sure you read the fine print during the 15-day free-look period. If you are not comfortable with the features, you can return the policy and your premium will be refunded after the deduction of stamp duty and proportionate risk premium for the period.

In case of general insurance, issues around processing of claims cause greater grief than misselling. Policyholders often complain that their claims are rejected on flimsy grounds. For instance, in health insurance, pre-existing ailments frequently become the bone of contention between the insurer and the insured.

"Pre-existing ailments are typically covered from the fifth year onwards, yet insurance companies avoid settling claims. Hypertension and diabetes are used as excuses to reject claims for heart and kidney problems. To avoid rejection on grounds of non-disclosure of medical condition, ensure that you complete the proposal form yourself. Never leave it to the agent. Since the agent wants the policy to be issued so he can earn a commission, he often does not disclose correct medical data. When a claim arises, the insurance company repudiates the claim, alleging suppression of facts by the insured.

Delay in claim intimation is another key cause of dispute. Irda has clearly stated that claims should not be rejected merely due to delayed intimation. Late document submission should not be treated as grounds for rejecting the claim, if it is genuine.

Despite taking all the precautions, if you feel you have got a raw deal, you can file a complaint through official channels. The first complaint should always be to your insurer. Do not approach the regulator without attempting to get your grievance redressed by the insurer.

You can file your complaint through the insurer's call centres, e-mail or branch office. If your query is not resolved at this level, you can approach the company's grievance redressal officer. If you still remain dissatisfied, lodge a complaint through Irda's dedicated grievance redressed portal (http:www.igms.irda.

gov.in). Once you register on the site and lodge your complaint, you will be able to track it as well.

You also have the option of approach ing the insurance ombudsman in your city, which serves as a quasi-judicial body . The ombudsman has the powers to pass orders pertaining to cases entailing a value of up to `20 lakh.

The decision is binding on the insurance company , but as a policyholder, you are free to move consumer courts if you are not convinced. Many policyholders, assuming it will be a long drawn process, avoid going to the ombudsman. However, awards can be granted in as less as 30 day.

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
      2. Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

Rs 14,000 Crore worth of tax free bonds coming soon from NHAI , PFC

  NHAI, PFC file prospectuses, coupon rate not yet decided MORE debt investment options have opened up for investors with AAA rated tax-free bonds worth over Rs 14,000 crore lined up. The National Highway Authority of India ( NHAI ) and Power Finance Corporation ( PFC ) are offering Rs 10,000 crore and Rs 4,033.13 crore worth of tax-free bonds, respectively, as per prospectuses filed with the Securities and Exchange Board of India (Sebi). Of a Rs 5,000 crore issue by PFC, Rs 966.87 crore has already been raised through private placement on September 28 and November 1. Tax-free bonds give investors tax-free return on any amount invested. In another kind of bonds, the long-term infrastructure bonds, investments up to Rs 20,000 are tax exempt, that is this cap amount can be deducted from the taxable income. Accordingly, the NHAI prospectus has clarified that only the amount of interest from -and not the actual investment on -its new bonds will be tax-free. "NHAI's publ...
Read more

Change in Fund Manager for some of HSBC Mutual Fund Schemes

Buy Gold Mutual Funds Invest Mutual Funds Online Download Mutual Fund Application Forms Call 0 94 8300 8300 (India) However, this facility is only available to Unit holders who have been assigned a folio number by the AMC.   HSBC Mutual Fund has announced that the below mentioned schemes shall be managed by the new fund managers as stated in the table. The effective date will be July 02, 2012.   Amaresh Mishra 's will be Vice President and Assistant Fund Manager. Having done a Post graduate diploma in Business Management and Bachelor of Chemical Engineering, he has over seven years of experience in Equities and Sales.   Mr. Piyush Harlalka's designation shall be Vice President- Fixed Income. Qualified as a C.A., C.S. and holding M.B.A.( Finance degree), he has over six years of experience in Fund management and ...
Read more

How EEE and EET Tax affect Retirement Investments

  An important factor while choosing a financial product is its taxation , and for retirement savings, this is even more important as the sums involved are usually life-long savings. Here's a look at the current tax treatment of three major long-term retirement planning products, which are - Employees' Provident Fund (EPF), Public Provident Fund (PPF) and National Pension System (NPS). EPF The tax treatment is EEE, which means your money is exempt from taxes at the time of investment, accumulation and withdrawal. At the time of investment, the tax deduction is under the limit of section 80C of the Income-tax Act , which is currently Rs 1.5 lakh. Partial withdrawals are also tax-free if made after 5 years of continuous service. If withdrawals are made before 5 years of service, 10% tax will be deducted at source. Exceptions have also been provided for transfer of amount and conditions wherein the subscriber is unemployed for more than 2 months or the loss of job was beyond th...
Read more

Personal Finance: You can insure your wedding

But luck may not always be on your side. With the frequency of such attacks, as also other risks and unforeseen accidents growing, a wedding insurance is something you may want to look at if a marriage is being planned in the family. Event insurance plans like this is still in its nascent stages due to low awareness. And given the sacred nature of the ritual, nobody wants to discuss or think negative. But as wedding spends and risks grow, it makes sense to cover the potential monetary loss. The policy in those countries even covers the loss of the wedding ring, the wedding gown not reaching on time and even the expenses/loss due to late or non-appearance of the photographer which may mean staging the event once again for the photograph. In India, most insurance companies — including ICICI Lombard General Insurance, Oriental Insurance, Bajaj Allianz and National Insurance — offer wedding insurance. The policy is tailor made to individual requirements and needs. The sum insur...
Read more

DSP BlackRock MidCap Fund

Best SIP Funds Online   HOW HAS DSP BlackRock Small & Mid Cap Fund PERFORMED? With a 10-year return of 14.61%, the fund has outperformed both the category average (12.34%) and the benchmark (10%) by a good margin. Should you invest in DSP BlackRock Small & Mid Cap Fund? This fund invests predominantly in mid-cap stocks but takes a sizeable exposure in small-caps as well. The focus is on nascent companies with high growth potential. The fund manager places emphasis on quality and avoids inferior businesses even if these look tempting from a valuation perspective. Over the past year, the fund portfolio has grown, having added to some of the underperforming sectors like chemicals and healthcare. Its portfolio churn has come down significantly. The heavily diversified portfolio is run completely agnostic of its benchmark index— most bets are from outside the index—which can at times lead to bouts of underperformance as seen in the recent years....
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now