Were you cheated when you were buying life insurance?

The answer to above question by many people was a thumping ‘YES’. Right from illiterate riksha puller to the highly educated dean of a premier management institute, I heard this complaint from many people.

‘I was told that the returns would be better than a bank deposit’. ‘I was told that my money would double in 3 years’. ‘I was told that Surrender Value would be at least 1.5 times of premium that I paid’. ‘I was told that I would receive a gold coin along with policy bond’. There were many more such false promises made.

It’s sad to see some people falling prey to cheating.  A little bit of caution while buying insurance would have helped avoiding this mis-selling. There are two important documents provided by life insurer, Sales Brochure and Benefit illustration. You need to go through both of them before buying insurance. You can also go through the website of insurer to find the details of the product offered to you.

In the Sales brochure, you can see all the features of the product. In the benefit illustration, you can see the projected value of the benefits like death benefit, maturity benefit and surrender values at various durations. In this benefit illustration, you can also find out what benefit is guaranteed and what is non-guaranteed. So, any promise related to any of these benefits can be verified in the benefit illustration. And in case of any doubt, you can contact the company through helpline.

Obviously, none of those promises mentioned above would be found in any communication of the life insurance company. No company has enormous capacity of giving those ultra generous benefits. And if any company does, they would advertise about it and also mention in their sales brochure. If you buy insurance without having some basic understanding of what you are buying, you will become an easy target for mis-selling.

‘I trusted the insurance agent and he cheated me’ is a usual answer. Of course, you should trust the agent if the offer is found reasonable. And there are many such agents who give you only correct information. But if the promise is sounding unreasonable, you must definitely verify the authenticity of the same.

If the money you are planning to invest is important for you, it’s important to understand where you are investing and what you would get back in return. Only then, you will make a right choice and not blame somebody else later.