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Tuesday, 29 November 2011

Dilemma of Indian insurance policy holders

Do you have an insurance policy which you don’t want now?  Several people approaches me and tell me  that how badly they are ‘stuck up' with their policies which they have purchased in past. Now they are obliged to service the premium payment even though they don’t want it anymore.

Buying a ‘suitable’ insurance policy is not a cake walk. Even though it is extremely important for every working individual for his/her long term future. There could be various reason why people don’t take policy; sometimes it happens policy holder is unaware about the benefits, sometimes insurance agents miss-sell.

Majority of individuals encounter problems in three phases:

  • At the time of purchase of the policy.
  • At the time of matching the need and what they bought
  • At the time  when policy is wrongly sold

The major problem they are facing is not in the selection of the features of the policies available in the market but on whom to ‘Trust’ regarding the policy explanation. Will this life insurance agent provide me right kind of the policy? Which policy has less commission? What about initial administrative charges? or will the insurance company provide me same maturity amount which is assured to me at the time of taking the policy?

In the search of right agent and insurance company, he/she sometimes forgets about the suitability of the policy for oneself and get distracted by the agent.

When he/she purchased the plan, the next series of problems arise – do the policy holder knows about his own plan – till how much time he/she needs to make payment/ what are the benefits under the plan according to his needs/ If he stops payment of the premium before the stipulated period what can be repercussions…so and so on ……………………. His problems do not end here.  There are many instances where insurance policies are wrongly sold and now policyholder has been left in lurch by the agent - his biggest tension is where to go? How he/she can further proceed? What to write in the application according to regulation of IRDA which will be acceptable by insurance companies.

Under different set of policies and problems, there are different forums, courts which provide solutions but now the easiest way is through Integrated Grievance Management System (IGMS), a platform provided by Insurance regulatory and development Authority (IRDA). It is a comprehensive solution which provides online and centralized access to policyholders. The data capturing mechanism works in such a way that it can record all complaints received via email form, physical form or voice calls. The Important point should be noted that policy complaint first should be registered with insurance companies then complaint it can be escalated with IRDA.

If you have queries or questions regarding your policy or you need advise, please feel free to write to me at ruchi.agarwal (at)

Ruchi Agarwal

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