Term Plan – Scary Experience – What Should I Do?

POSTED BY monGenie ON January 31, 2012 1:01 pm COMMENTS (15)

Hey Guys,
Recently we bought a offline term plan in name of my husband and currently we are in Free Look period. I have been watchful during the whole process with whatever little knowledge I have gained from this forum, books etc., thanks to Team JagoInvestor!
Here is what has happened:
As usual, company’s proposer and witness (agents) had come for filing the proposal form. They asked us questions like alcohol and we stated that he (my husband) drinks twice-a-month also we mentioned that his father has high blood pressure, but while reading the policy document I realized that he ticked both as “No”. Also, we didn’t want initially to buy any riders available and go with plain vanilla term plan, but the agent said Permanent Disability rider is good since it pays you 10 lacs should something wrong happen to the insured and it waives off further premiums. So, we opted for it. Again the policy doc says that we opted for Accidental Death Benefit.
I called the agent, he said that sir (my husband) wanted to opt for ADB which is not the case. And when I asked him about alcohol and father’s high bp, he said if we mention that in the proposal form company puts additional charges and it takes longer for the policy to convert. What the heck!
I don’t understand this and this really scares me. If this is how they give customer service at the time of purchase, what will happen at the time of claim? What should I do – continue or cancel the policy?
Please giude.
Thanks!

15 replies on this article “Term Plan – Scary Experience – What Should I Do?”

  1. Dear Mongenie, All well that’s ends well. No matter you are filing complaint against that corrupt agent or not, the base line is, the over all things should be clear to not only you but also to your friends from your experience.

    I’m also amused for that Kotak advisory offer from that kotak staff. I feel, the way you handled all the things, the Kotak people sensed that you are reading & having a lot of knowledge (& this time they are true) for all these insurance related things, that’s why they made an offer & in a sense to me – it’s a type of bribery to keep your mouth shut. πŸ™‚

    Please go ahead, & purchase another term plan, right away. Regarding the question of total cover as on date, you may skip this Kotak cover. Reason – officially you have applied for the cancellation of the cover & in case if some thing happens to your husband (just giving an example – not meant for actual happening), the Kotak ‘ll not entertain any claim on this policy.

    Please purchase another term cover right now. As time is limited with you, you may opt to IPru’s I-care as it;’s non medico till Sum assured 1.5Crore, which ‘ll save your time for medical test & other things if you opt any other plan.

    Thanks

    Ashal

  2. monGenie says:

    Aah.. BTW.. do I have to wait for this policy to cancel before I can apply for another online term plan?.. or it’s only me who thinks I have to?? I am asking this because these there is a question in life insurance application form – “do you have other life insurance policies and their status etc” and right now the policy is not yet cancelled on paper, I have just applied for cancellation and it will take working 7-8 days for actual cancellation.

  3. monGenie says:

    Thanks to you, Manish and Ashal, once again.

  4. monGenie says:

    Manish and Ashal,
    I have finally cancelled the policy today and got the acknowledgement. However, we decided NOT to lodge the complaint for two reasons:
    1. I have a feeling that they will not address my complaint against the agent as per their attitude towards the whole thing, but they may create hindrance in the cancellation process. This will add delay in applying for another online term plan. (No Manish I won’t wait for LIC’s term plan πŸ™‚ )
    2. My husband is supposed to travel outside India within a month or so. If they don’t address the complaint, it’s really difficult for us to pursue through Kotak’s grievance addressal official and Insurance Ombudsman since the complaint is undersigned by my husband as the policyholder.

    Guys, I really wanted to lodge a complaint and save other people the horror, but I couldn’t – I am really sorry. But I can surely put the review on mouthshut.com etc.

    BTW.. one more thing I forgot to mention yesterday… Kotak person with whom I was dealing asked me to take training and become Kotak Life Advisor saying that you have good knowledge etc. and be my husband’s policy proposer and earn commission for next 30 yrs!!! I was stunned at his converting skills. πŸ™‚ And there’s more to it… I am not sure if this is same as pass-back, he himself was offering me pass-back.

    β€œExperience is one thing you can’t get for nothing.” ~ Oscar Wilde
    Feeling much in control and confident after facing the ground reality of bad insurance industry practices. Now I understand why claims are not settled and how to handle tricks played by the agents.

  5. Dear Mongenie, let me add why, Kotak people are interested to save that agent? The story ‘ll not stop only with the firing of agent. The questions ‘ll be raised for the over all practices adopted by the kotak staff & many more people (read kotak staff) ‘ll fell due to your complaint.

    There is no such law/act/rule from IRDA or Govt. of India that free look period of policy ‘ll be stopped immediately if you are lodging a complaint. Interestingly, if you do cancel the policy first & once the policy get cancelled, Kotak is no more in relationship with you & it ‘ll not answer your complaint. In this case, your only option to file complaint ‘ll be to go for Insurance ombudsman. This is the trick Kotak people are playing with you. So do the both things co currently. Cancel the policy as well as lodge a complaint against the agent. Even you may give a threat to file a police complaint against the agent & kotak for the case of forgery, cheating & criminal conspiracy, for the concealment of facts in your proposal & this ‘ll surely work.

    Thanks

    Ashal

  6. I dont think there is any law like that that your look up period will get cancelled because you complain about agent ! .. It might be again their trick to scare you to save their agent ..

    However you can wait on your complain .. you can do that later also ! . Now better go for HDFC Click2 Protect or Aviva .. LIC online term plan is also coming next month πŸ™‚ .. Now dont tell me you are waiting πŸ™‚

    Manish

  7. monGenie says:

    And the story continues…
    Today I have applied for the cancellation – they were trying to convince me for alteration of the policy and was asking me if you really want to lodge the complaint against the agent as it can withdraw his license.
    After telling them firmly that I have made my mind to cancel the policy and lodge the complaint, they told me to hold the complaint back till policy gets cancelled. Again for a strange reason – if I lodge complaint now my free look-up period gets cancelled!! seriously?? give me a break.. what’s the use of free look-up period while I cancel my policy? It is done anyway.. isn’t it??
    Now I have dropped the idea to even go with their online policy.. enough is enough!
    But good news is that I have learned my lesson to fill policy proposal on my own. Happy for that! πŸ™‚
    BTW do you people really think I can’t lodge the complaint before my policy is cancelled??

  8. Dear mongenie, immediately contact the customer care of Kotak on phone (Not agent), inform them the concealment of fact done by the agent & not by you. Ask them to underwrite the policy again based upon the fresh disclosures from your side & your unwillingness for that rider. In all probability Kotak cust. care ‘ll help you out. In case the answer is not satisfactory or no inclination is there to rectify the mistakes in the policy, cancel the same. At the same time please lodge a written complain also with Kotak for the wrong doings of the agent & force them to cancel the license/relationship with the agent. It’s not only you who is suffering, but in future also this agent may create similar issues to other peoples & at the end – when the need arise (read claim ‘ll be filed) this agent ‘ll not come forward to help you or other policy holder.

    Thanks

    Ashal

    1. monGenie says:

      Hey Ashal, BTW, thanks for your concern. I did as per you suggested and the result is as mentioned above.

      1. monGenie says:

        my bad… result is as mentioned below and not above.. sorry for that.

  9. monGenie says:

    Thanks for appreciating, Mr. KK Babu, but honestly I am still quite naive in terms of knowledge.

    I think you’re right that online policy has all the benefits you already pointed out, but when I called the company I did some research and found that riders are mainly available with offline policies and I thought riders are good-to-have features. It is only later that I understood while surfing this forum that we should rather go for plain term plan.

    The only thing is that offline policies are processed faster (not necessarily better) as compared to online policies. But after having such experience I am more for online policies.

  10. KK Babu says:

    @monGenie

    Madam, it is good to know that you got the knowledge from Jagoinvestor and other such forums.

    As clarified by Mr. Manish, it would be better to cancel the policy and go for fresh one (may be with the same service provider).

    But, as per my understanding from this forum:

    Online Policies are much cheaper and less complicated. Also, we ourselves can fill the application form and hence, less chances of wrong entries. We can easily avoid the above mentioned mistakes in online policies. The online policies are less prone for tampering.

    Even though you are much knowledgeable about Term Insurance policies & procedures, you have opted for Offline Policy. May you pl. let us know the reasons for preferring Offline policy over Online Policy.

    Your information will be useful to other members of the forum like me.

    Regards, KK Babu

  11. definately cancel the policy if its in free look up period . Tell agent that he should help you cancel the policy else you will complain to IRDA about what he did and get his license cancelled , which you can really do for what he did .

    You shall definately cancel the policy , but the other thing you can do is talk to company that those points mentioned (about alcohal and illness) is incorrect .. The premiums will go up for this, but its fair and deserved.

    if you continue this, you are just doing charity , nothing else because the claim will not be paid .. The issue is more with agent and less with company . The agent is unethical .

    Which company was that ? you didnt mention it ..

    also is the amount of premium already gone from your bank account ? Take it up as P1

    Manish

    1. monGenie says:

      Thanks a ton, Manish, for helping me out!

      Insurer is Kotak Life Insurance. I agree with you that the problem is more with the agent and less with the Insurer – intent wise, but I wonder about their policy election process. Anyway, I will now start the process to cancel the policy.

      But I don’t think I should approach the agent for the same as I will be unsure of his response etc. and I don’t trust him.

      Are you suggesting to talk directly to the company for correcting and revising the proposal by any chance? If yes, whether I should talk to customer care or operations team of the company?

      BTW, Manish, once again thanks for your help.

    2. monGenie says:

      Yes, Manish, premium amount has already deducted.

      Now after having such an experience with offline I am thinking to go for online term policy. May be ICICI iProtect… Do I have to wait for this policy to get cancelled??

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