An Insurance policy can be a boon, if taken wisely and can be a curse, if taken without proper advice and out of greed, enticement and inducement. Insurance is a great instrument for uncertainties and unforeseen adversities, however, if taken out of greed, intended or believing that it will give undue and unrealistic benefits, then, it can turn into a curse. It is because taking insurance policy is easy but getting an undue claim or benefit out of it is very difficult.
Never buy insurance out of greed or as a result of inducement or enticement. Most of the inducements are fraud in the first place. There is a concept called Spurious Calling in the Insurance Industry. A lot of people fall prey to these spurious calls. These spurious calls are from an unidentified individual posing to be the officials of Insurance Regulatory & Development Authority of India (IRDAI)/Integrated Grievance Management System (IGMS)/ Insurance Companies making fictitious and fraudulent offers. The callers also use names such as Insurance Transaction Department, RBI or any other name of existing government agencies or some non-existing fictitious entities names or in some cases, Insurance Companies.
The modus operandi of these spurious calls starts with offering undue and unrealistic benefits in the existing life insurance policies including lapsed policies of policyholders. Further, the callers lure the prey with huge benefits such as unclaimed bonus, agency commission, extra bonus, unrealistic benefits etc. which the prey can claim, subject to upfront payment of some fee/advance tax /deposit or payment in any other name to open some benefit account or buy insurance policies etc. So, buyers; beware of these fraudsters who can take away your hard-earned money.
One of our clients had fallen prey to these kinds of inducements and lost all his retirement funds. We strategized his case and got his funds back within a tenure of less than two months by issuing a detailed legal notice to the Insurance Companies by capturing the nitty-gritties of Insurance and informing them what had gone wrong and the Insurance companies understood it well and have refunded the entire premium back. What a win-win outcome indeed it is!
In this regard, IRDA has issued public notices and have many a time cautioned the public at large and urged the public to remain alert and not to fall prey to frauds or scams perpetrated by miscreants who impersonate to be employees/officers of IRDAI, IGMS, RBI, Government Departments or Insurance Companies. The IRDAI advises that before making a financial transaction based on the telephonic conversations it is necessary to verify the identity of the Caller. The facts can be verified at authorized offices/call centers of insurance companies. The telephone numbers of the authorized call centers can be verified in the policy documents/official websites of the Insurers.
Aside, never just sign the blank proposal form and give it to the Insurance Agent to fill in the details. Fill the form your-self. Give all the details as asked in the proposal form to the best of your knowledge. Make all disclosure such as medical history and financial liabilities. Never hide any previous insurance policies, claims made or ailments suffered. Insurance Agents may tell you not to disclose all the information as unnecessary or unimportant. Please note that they are not going to underwrite your policy and are also not going to give you the claim and benefits available under the policy. Underwriting and claim assessment teams are different and Agents or Spurious callers cannot influence their decisions.
Kindly note, Insurance is an agreement between you and your insurance company. Agent is nothing more than an intermediary. Agents are merely for sourcing or selling the policies. They are going to get commission out of the premium paid by you. When there is time to pay a claim, there is a different team which investigates the details as given by you in your proposal form and any non-disclosure is going to make your policy null and void as Insurance is a contract of utmost good faith.
Further, as per Section 45 (4) of Insurance Laws (Amendment) Act, 2015, any life or health insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud or suppression of a fact material to the expectancy of the life of the insured was incorrectly made in the proposal or other document on the basis of which the policy was issued.
In view of Section 45 Insurance Laws (Amendment) Act, 2015, the Insurance Company is going to reject the claim if there is any material non-disclosure and cancel the policy, if they smell a fraud by the proposer or policy holder at the time of taking a policy. We all should be aware of this fact which is the most important aspect while taking any insurance policy. While taking an insurance policy, always take care of the following:
Never fall for enticement or inducement for unrealistic benefit or gains. Before making any financial transaction based on the telephonic conversations it is necessary to verify the identity of the Caller and it is also better to consult some expert in the field of Insurance.
Never lie or hide anything in the Proposal Form and always try to fill the proposal form yourself and never just leave them at the mercy of your insurance agent. If possible, keep a copy of the filled up proposer form with you before handing it over to the Agent.
Always receive the calls including welcome calls from the Insurance Companies and tell the truth about the facts they ask and not what the Agent or Spurious caller has told you. These calls are mostly from a landline number.
Always read the contents of the Insurance policies as soon as you receive it, if not all, then, the premium to be paid, premium payment term, sum assured and maturity benefits.
If you observe that anything in your insurance policy is not as per the terms as was informed to you, you have fifteen days’ time, which is called free look period, to get your policies cancelled and if you approach your insurance company with the discrepancies in your policies, your policies will be cancelled and you will get refund of all the premium paid by you.
Please note that Insurance is really a boon for uncertainties and unforeseen adversities of life. In view thereof, we should always take utmost care while buying an insurance policy, because insurance is a pool created by people who are contributing for uncertainties and unforeseen adversities for each other. Hence, if one person is trying to play a fraud, then that person is playing a fraud not only with the insurance company, who is merely a trustee of that pool, but with the entire group of people who are contributing in the pool. Insurance Companies are taking a great care to avoid these kinds of frauds, hence, please keep your greed and enticements at bay while taking insurance policies and if these enduements are kept at bay at the time of buying a policy, then, you will reap the real benefits of Insurance, else, you will lose your money. As such, Insurance buyers; be aware!
(The author is an advocate of Jammu & Kashmir High Court)