‘Mis-selling rampant in the insurance sector’

: Insurance Ombudsman P.K. Vijayakumar said that mis-selling of policies to people, mostly uneducated and poor, is rampant in the insurance sector.

Talking to the Hindu at his office, Mr. Vijayakumar identified attempts by insurance companies, mostly in the private sector, to deny death claims on flimsy grounds as another unhealthy trend in the sector. He drove home the point citing demonstrative instances where the policy holders and the nominees of the deceased were taken for a ride by insurance companies.

In one instance, a middle-aged woman, who worked as a maid in Thiruvananthapuram and had no assured income was tricked into buying a policy. She was told that she needs to pay only three premiums of Rs. 30,000 each and she would get double the investment. She stopped payment after paying Rs. 90,000 in three premiums only to be told by the company that the policy had lapsed owing to non-payment of premium and that she would get just Rs. 50,000.

The Ombudsman directed to cancel the policy and return the full amount of Rs. 90,000 against which the insurance company has filed a writ appeal in the High Court. “The company knows well that there is no precedent of getting any relief from the court in such cases. They just want to delay the payment, which shows their callousness,” Mr. Vijayakumar said. In fact, the same private insurance company has filed three more writ appeals in similar cases.

In another case, a 24-year-old widow had to approach the Ombudsman to get the insured amount of Rs. 10 lakh after her husband died in an accident in Coimbatore. The insurance company tried to deny the claim by manipulating the case, making the death appear to be caused by rash driving by the deceased.

The Hindu

Leave a Comment

Your email address will not be published. Required fields are marked *