Vikrant bought an insurance policy in 2009 which he wanted to surrender now. He submitted his request to the company and got the proceeds in few days. But when he showed it to the tax expert he was in a shock that the insurance policy was actually of post-2012 date and the policy does not fulfill the new rules so all his proceeds will be taxable. He went back to his agent to enquire and there came a very strange answer by him – ” Sir, as per IRDA norms all old policies have to be shifted to new policies post 2012 date and you have given your consent”. Vikrant did recollect his agent visiting him in that year. Now he knew it was a case of some mischief by his agent and he had to engage in a legal battle to recover his money. In another case, Subhash made a proposal for a term insurance which got delayed by almost six months. To his surprise the first agent goofed up in medical test then the documents went missing from the company and then there were stupid reasons given for the delay in issuing the policy.
We might not come across but cases like these are common. Lack of knowledge among the agents and goof up by the company employees gives a very bitter experience to insurance buyers. Many just do not want to engage with the company again because they have really a bad experience. For insurance companies, agent workforce is still a strong channel but very less is being done to upgrade their knowledge beyond the product. Hence more awareness is required from the buyer to ensure he is not taken for a ride. If you are at an increased risk of fractures due to osteoporosis and other medicines are not suitable for you, you can take livial to prevent osteoporosis after menopause. All medicines have risks and benefits. Your doctor has weighed the risks of you taking Livial against the benefits they expect it will have for you.
Here is how you are taken for a ride if you are unaware :
1. Applying For Insurance
Every process has time to follow the company should not take more than that. If you have made any proposal to an insurance company there is a time for the medical test. Ideally, within a week you should get a response from the company for booking your day and time for a medical test. But first thing first when you are giving documents to the agent fill up the complete form by yourself and take a copy of the form along with all the documents. This will ensure you have information what is submitted to the company. When premium amount has been debited from your bank account then you have actually made your commitment. It’s now company’s turn to speed up the process. Here it has been seen that most agents goof up. They will not be knowing what medicals actually to be done. So while submitting the proposal you should ask your agent to give you complete information on what medical test will be done. Instead of relying on agents knowledge gets the information from the company document which clearly mentions at what age and insurance amount what type of medicals test is required.It is also a common practice that at the higher age most agent will try to avoid some difficult medical test. If your agent is trying to convince you on this find the reason. Many a time it is done to speed up the issuance of policy for want of commission in which case your sum assured will get lowered. Once your medical tests are done then you should receive a policy within few days. Again anything beyond a week or 10 days is not justified. If it’s getting delayed write to the company demanding your policy document. Remember sometimes to pass the free look period the delays are done. If its happening then you need to act strongly.
2. Surrendering The Policy
Many a times delays or goof ups does happen at this stage. But firstly your agent will hardly provide this service to you so in most probability you will have to take the task in your hand. If you want to surrender the policy first you need to know what amount you will and is there any tax liability. What Vikrant experienced was not a unique case but common mischief from the agent. At times an agent will visit you on the IRDA norms and then will get your policy transferred .What mistake you do here is signing up on the blank proposal form. Do read through and aware yourself about the form you are signing. You need to be vary of any such advice which agent brings to you on switching your insurance policy just because there is a new IRDA norm. With frequent changes by IRDA this advice has been rampant.
3. Managing Your Policy
You have been managing your ULIP policy from a good number of years. But whenever you ask statement from your agent or company there is an element of advice which comes with it to switch to another product which will deliver you better returns than this. They will explain you details on the phone. If you agree, the representative or agent will visit you to give you more details. Many have accepted this advice but end up incurring a huge cost. Remember exiting a life insurance product is costly and does not reap you any benefits.
We won’t see all these cases frequently because not every comes in the newspaper. It’s only when it reaches to the height of legal battles or bigger fraud that it becomes the news of the day. But cases like these are very common and one need to be very careful and act upon at right time to ensure your proposal is not ruined by any intermediary or company representative. If you are not getting a response within the time frame it’s your turn to ask the company to speed up your proposal.