We are in a modern era where we have to lie to make our living. In fact, these things have just become a part of our lives. We see nothing wrong in the tons of lies we speak out. If all of us can lie, then why not insurance agents? Let me tell you, this is not to target them. They are duty bound and have tremendous pressure of targets from their bosses. It’s the insurance companies which push agents to sell various insurance policies by hook or crook. Here are seven popular lies of insurance agents used to sell policies to customers:
Lie 1: This is the best policy for you
Fact: I am sure you must have heard this from all the insurance agents who have approached you to sell insurance policies till date. The moment they see you, they turn into astrologers and without knowing anything about you recommend a policy. What’s worse, they tell you that this is the best insurance policy that you can get. The fact is that they would have recommended this policy in any case. It could be because they might receive the highest commission for this policy. This is just a typical marketing trick to fool you that they have analyzed your situation and hence recommending this policy. Ideally, any financial advisor should recommend a product only after assessing your goals, age, risk appetite, etc.
(Also see: Agent commission in insurance)
Lie 2: It gives you assured returns of 15% p.a
Fact: The number might differ (upwards). But, this is another popular plot laid by agents while explaining (distorted) facts about the policy. They will just give you their lucky number. Whether the policy has achieved such returns or not matters the least to them. Another disturbing fact is that they state these numbers for traditional policies which invest in government securities. Some of these policies have failed to beat inflation. Average returns for these policies are around 5-6%, which is just 3 times lesser than what they promised. Whenever you hear such numbers, you have to ask for written declaration by the insurance company and the securities that they choose for investment. Only equities can generate such returns in the long run.
Lie 3: This policy is for a limited period
Fact: This looks more synchronous with end of season sales. But, this is also used by a lot of insurance agents as a desperate attempt to sell this off. It’s a marketing tactic to sell things by stating that they would vanish after some time. This could be seen by few LIC agents last year who sold popular policies like Jeevan anand and Jeevan saral by stating they would no longer be available after a certain period. If a policy is going to expire soon, let it be. There are tons of policies in the market waiting for you. You need not rush to buy it now. Always compare and buy insurance.
Lie 4: Term insurance is a waste of money as you won’t get back anything
Fact: The moment you talk to him about term plans, this would be an instantaneous answer. He will tell you that you will not get back anything in return after the term is over. Well, that’s what it is designed for. It has been made specifically to serve the insurance needs rather than investment needs. Online term insurance gives greater sum assured for a cheaper premium. This is a proven fact. Do not get lured by the ‘returns’ aspect mentioned by the agent. There are multiple investment products in the market. Term insurance is your best bet when it comes to protecting your family. Calculate your insurance needs and then select the policy.
(Also see: Life insurance premium deciding factors)
Lie 5: You only need to pay once for this policy
Fact: This is a trend. Agents have been trying to project regular policies as single premium policies. Since there are more chances that you would give a skip to reading the big policy document, you will only realize this when you receive a reminder for the second premium. By the time you search for him, he will be onto some other company. Unique ids for agents have been proposed by IRDA, but it could take time to get going. Be careful in knowing what type of policy you are about to purchase – pension plan, single premium, money back, etc. Performance comes later.
Lie 6: You need to pay premiums only for 3 years
Fact: This is specialized for ULIPs. The agent will tell you that you can stop paying premiums after 3 years. The fact is that there is a 3 year lock-in on the ulip you are about to purchase and you cannot withdraw funds till that period. In no way it means that you have to stop paying premiums on the policy after this period. Once again, if you do not read the fine print, you would only come to know about it after 3 years.
Lie 7: Online policies have bad settlement records
Fact: Here is the final and the latest. This applies more to those trying to sell offline term plans. If you argue that online policies are cheaper and give greater sum assured, they will immediately speak out on claim settlement. The fact is that IRDA publishes claim settlement ratios of insurers with online and offline combined. Hence, there is no base to state that online policies have bad settlement record.
Few points to remember
- Always do your own research before calling upon an agent
- Fill up the forms yourself instead of leaving it to the agent
- Ask the agent for written declarations when he speaks about returns
- Do not distort the facts (for lesser premium) even if the agent says so
- Check the claim settlement record of the company before hand