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How People Get Cheated While Availing Term Life Insurance Plan?

IamCheated.com Research Team | November 17, 2018  6:22:pm

It is very important to protect loved ones with a term life insurance plan, if you are the only earning member in the family. Term life insurance meets the financial needs of your family and it makes sure they don't depend on anyone when you are not around. As many citizens are coming forward to protect loved ones, cheating in insurance is increasing. In this blog, we will discuss how people get cheated while availing term life insurance plans.

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How people get cheated while availing term life insurance plans?

1. Mis-selling in endowment plans

When people come forward to avail term life insurance plans to protect their family, they are misled by insurance agents and tricked into availing endowment plans. This is done mainly to get a high commission in case of endowment plans, when compared to the term life insurance plan. But, endowment plans are not pure risk protection plans like a term life insurance plan. It is insurance cum saving plan which have quite high premiums. It offers low mortality cover. In the case of endowment plans, half of the premium you pay goes for insurance and half goes towards saving. A term life insurance plan is a better deal in case of the unexpected demise of the breadwinner.

See Also: How To Judge A Life Insurance Agent?

2. Insurance agents stress on survival benefit

When availing the life insurance plan, agents stress on the survival benefit. They try to convince you to avail a plan which has got survival or maturity benefit. Survival benefit is the amount you get in case you survive the tenure of the plan. Agents tell you not to avail term life insurance plans, as they don’t offer a survival benefit. But, they neglect to mention term life insurance offers a high sum assured at a low premium. If your intention is to financially protect your loved ones when you are not around, don't look at the survival benefit.

3.  Agent tells you no medical tests required

Insurance agents try to cheat you while availing term life insurance by saying no medical test is required. It is advisable to undergo a medical checkup while availing a term life insurance plan. If you hide a health condition or pre-existing disease, your family might not be able to get the claim.

4. Smoking and the drinking habit

Insurance agents advise not to disclose the smoking or drinking habit while availing term life insurance. They do this by saying they can help save on premiums. Never hide these habits from the insurance company. If the insurer gets to know this, the claim will not be settled.

5. Hidden clauses and exclusions

In the greed of pocketing commissions, some insurance agents don’t mention certain clauses and exclusions in the term life insurance policy.  Not disclosing facts can lead to the rejection of claims made by your family members. Some agents do not mention exclusions. Exclusions are events or conditions which are not covered under the policy. So before availing the policy, take a look at the exclusions.

6. Does not mention the claim settlement ratio

Claim settlement ratio refers to the number of claims that the Insurer has settled following the death of policyholders. It is advisable to opt for an insurer which has got more than 90% claim settlement ratio as they are more likely to settle claims. Sometimes the insurance agents try to cheat you by not mentioning the claim settlement ratio, especially if it’s bad.

7. Does not mention the Free Look Period

Free look period is a period in which you are allowed to return the insurance policy availed, on not being happy with it. Free look period is for 15 days and it will start from the day you have received the policy documents. After returning the policy, you will get a refund on deduction of certain charges. Many insurance agents do not mention anything on the free-look period.

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