Oh My God… …I have been fooled again…Why Is It Always Me…These are the questions floating through my mind every time I read about misselling of insurance in the newspapers or television. This is a word ‘Misselling’ which all of us have heard and many of us have experienced in some form or the other particularly in Financial Products. My insurance agent sold me the wrong policy…. When I try to call him his mobile is unreachable…My agent has disappeared. after selling me the wrong policy.. . What can I do now…If you have been subjected to misselling practices you can post your complaints on IndianMoney.com
Speaking of the word misselling I remember an engaging advertisement I had seen on television. Here an insurance agent is advising a client on what insurance policy he should purchase. A Devilish creature stands behind him invisible of course, and symbolic of greed. Here the client asks him some questions, obviously showing that he is misinformed. He is a perfect candidate for misselling .He even asks if he should sign on the dotted line immediately. The Devilish creature asks him to encash this opportunity. This agent however refuses to missell him the policy and tells him the whole truth explaining the policy in detail. Only then does he tell him to sign on the dotted line. The Devilish creature disappears in a plume of feathers …The Company involved tries to make its point. This advertisement reminds us of the rampant misselling practices present in the insurance industry. Isn’t it up to us to stop such unethical practices? On a lighter note Never Test The Depth Of Water With Both Feet.
We know that the sole aim of marketing is to sell more to more people. There is no other reason for it. Insurance agents are no different. They would sell you products which would suit their needs giving them maximum commission. They have targets you know…Here whatever they say needs to be taken with a Pinch of Salt… I would like to remind all of you that the team of Financial Planners at IndianMoney.com are always there for you to plan your Insurance needs in a most effective and efficient manner. You can explore this unique Free Advisory Service just by giving a missed call on 02261816111.
Misselling is misleading investors about the features of a product. Here in order to sell a product the insurance agents may hide certain critical information. Here the insurance agents tell us what we want to hear. They describe the product as if it is tailor made to suit our needs. Here selling of a product to the customer on the basis of wrong or incomplete information or selling the wrong product with correct information to a person who does not need it is called misselling. For your Financial Planning needs please contact IndianMoney.com.
Why Does Misselling Occur:
· The Two In One Option : Many people purchase insurance policies solely with an aim to make better returns. Insurance policies are meant to offer protection and expecting better returns from them is wrong Remember never mix insurance and investments. It is like trying to mix oil and water….For your Insurance Planning needs please lookup the site IndianMoney.com.
· Please Hurry I Have A Bus To Catch : Here customers are in a hurry to purchase a policy without reading the fine print. The insurance agents exploit this by saying what is our fault in this . It is not our obligation to tell the whole truth, else how will we sell anything. Here there is a famous saying Urgent Can Drown Out The Important.
· Look Before You Leap : Here many times an agent may be a friend of a friend or recommended by close relatives. We hesitate to say No. This hesitation leads to the purchase of wrong policies. Agents also try to act like Financial Advisors which doesn’t help matters. Remember Marketing Wants Mr Right But Sales Wants Mr Right Now….
· All That Glitters Is Not Gold: Term Policy is a useless policy because there is no cash value. This is often perceived by policy takers. The Insurance agents attempt to pass on products which would raise their commissions. The insurance agents exploit the philosophy ‘People Don’t Buy For Logical Reasons. They Buy For Emotional Reasons’
· More The Merrier: Here policy takers want not only cover and cash value but also good tax returns. This situation is widely exploited by agents who tell customers what they want to hear omitting the necessary facts. Remember an insurance agents motto is For Every Sale They Miss Because They’re Too Enthusiastic They Will Miss A Hundred Sales Because They’re Not Enthusiastic Enough.
· Lock in period: Agents fail to mention the lock in period of these policies. The agents say the customers do not ask…so why should we tell…
· Feeding Peanuts To Monkeys: Here customers may be offered certain benefits such as a 5% rebate on the premium or certain other benefits. They fall for this without checking the facts of the policy Here in the rush and melee to grab small benefits we end up missing the bigger picture.
· Fishing In Murky Waters : Here some of the Insurance policies such as ULIPS have a very complicated Arithmetic structure not perceived or understood by the common man. We should desist from such policies until we have all our facts and figures right .Here the Devil is in the details. Insurance agents look out for such opportunities.
· Misselling Through Banks: Here we notice that majority of mis-selling cases are happening through banks. This may be because a person has a Saving Bank Account and banks have all relevant information about the customer. Banks try to cross sell Insurance products to their Business clients and their HNI Clients.
Better The Devil You Know Than The Devil You Don’t:
Let us consider the following case in order to understand how misselling is done. Here Mr. Suresh purchased a ULIP Plan from a highly reputed Private Insurance Firm after being sweet talked by an insurance agent. He was promised a high rate of return and he purchased the policy. He paid a premium of INR 40000/annum as agreed in the policy. He was shocked to see that there was a monthly deduction of INR 1000 on the policy towards charges. He called the agent to enquire about this and was promptly told that this amount would be deducted from the returns the policy generated once these returns were generated. However he found that he was charged monthly deductions on the policy from the premiums paid. He was furious and asked that the policy be canceled.
He was told that the surrender value was in the negative, meaning he would have to pay more money to cancel the policy. He contacted the agent who said he would cancel the policy and he would get the invested amount back in three years. He contacted the helpline who said there was no way in which he could get back the amount as he had signed the policy after having a grace look in period of 15 days .Here when the agent had made him fill up the form he gave him the template to fill up and just asked him to sign on the application form. Here the agent had not shown him the application form because it contained information on the charges and only took his sign on the application form. Within a year the value of the investment was about INR 10000…Clearly a case of misselling…….Here it is wise to note that A Leopard Cannot Change Its Spots
What Did Mr Suresh Do Wrong?
· Here Mr Suresh signed up for a highly complex financial product such as a ULIP which he himself would admit he knew little about.
· He was in a hurry to sign the policy without insisting from the agent to see the fine print.
· He blindly trusted the agent.
· He did not check the lock in period.
Remember that Misselling Occurs Everywhere:
Let us consider our neighboring Kirana store where we purchase our daily groceries. Here the man at the counter may also be selling real estate or insurance policies. He is our trusted person and we feel obliged to give him our ear. We get taken up by his word and take up an insurance policy on his recommendation. Not surprisingly this may turn out to be the wrong decision. I would like to remind all of you that the team of Financial Planners at IndianMoney.com are always there for you to plan your Insurance needs in a most efficient manner. You can explore this unique Free Advisory Service just by giving a missed call at 02261816111.
Here I would like to end this article by saying that most of the investors are not willing to accept their shortcomings and hence cannot bridge the necessary gap. The biggest failure of an investor is the acceptance of the fact that he knows little of say Insurance when he may be the master of Software. A person who has little or no knowledge takes dangerous risks. He Rushes In Where Angels Fear To Tread. He becomes a victim of misselling. This is definitely his own fault and he cannot blame the insurance agent alone. Hence here a careful introspection is needed by a policy taker before he makes his purchase. You can post your reviews and comments if you have been subjected to misselling on IndianMoney.com.
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.
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