“Knowing where the trap is—that's the first step in evading it.” This is a famous saying by Frank Herbert. Yes…Your insurance agent is a very cunning man. He lays traps hoping you will fall in them.
Now, how about this saying. “A trap is only a trap if you don't know about it. If you know about it, it's a challenge.” When you buy a life insurance plan, health insurance plan or any insurance plan from an insurance agent, you got to remember this…. Sellers of financial products/insurance products are no different from sellers of any other product. Your insurance agent first thinks about himself. Your needs come second.
Why does an insurance agent want to trap you? Simple….he earns a hefty commission from selling certain life insurance plans. He recommends these life insurance plans, not caring if they match your needs or not. He also neglects to mention hidden fees or any other feature of the life insurance plan, you need to know. This rampant practice is called mis-selling. Mis-selling of insurance plans is a trap laid by the cunning insurance agent, hoping you will fall for it.
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Don’t be a fool this April. Take a look at these cunning traps laid for you by smart insurance agents. Want to know more on insurance plans? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com website. IndianMoney.com offers Free, Unbiased and on-call financial advice on Insurance, Mutual Funds, Real Estate, Loans, Bank Accounts and capital markets
#Trap 1: Insurance agent asks you to avail a life insurance plan with high sum assured
Does your insurance agent visit you trying to sell a life insurance plan with a high sum assured? The question you need to ask yourself….Do you need a very high insurance cover?
Take a look at your expenses and loans….do you have to repay a car loan or a home loan…. Then take a look at your and family future financial goals. Buy a life insurance plan, only once you are sure of your liabilities and future financial goals.
Availing a life insurance plan with too high a sum assured, will only blow a hole in your pocket. You will end up wasting money on insurance cover you don’t need. This money will end up as commission in the life insurance agent’s pocket.
Your insurance agent is selling you an endowment life insurance plan. He promises you a bonus on this endowment life insurance plan. You also get money (maturity amount) if you survive the term of the plan.
What your insurance agent doesn’t tell you? He gets a hefty commission of around 30-35% of the premium you pay on the endowment life insurance plan. So what do you get? Part of the premium you pay, goes as a commission to agents. Another part goes to give you insurance cover and part of the premium is invested to give you returns. Now it’s simple isn’t it? What returns or for that matter insurance cover will you get, once the insurance agent takes commissions from your premium?
To escape from this trap, just answer this question? Why do you avail life insurance? Is it for returns or for the protection it gives your family in your absence? If you want your family to enjoy the same quality of life they currently enjoy even in your absence, it’s best you avail a term life insurance plan. There are a lot of financial products out there, which give much higher returns than an endowment life insurance plan.
Free look period is nothing but a 15 day time period, given to you by the insurers as per rules of the IRDA. Once you avail an insurance policy either offline or online, the policy documents are mailed to you. The 15 day free look period begins once you receive the policy documents.
You have 15 days to study the plan and see if it fits your needs. If you find hidden fees or any feature of the life insurance plan you don’t like, you can return it within the free look period and get a refund after deduction of certain charges. If you find hidden fees or some feature not conducive to your financial needs in the plan, you know the life insurance agent has tricked you.
Yes...It's time to avoid the traps set for you by cunning life insurance agents. Empower yourself with knowledge and fight back. Don't become a victim of mis-selling.
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