"Hello. I am calling from Irda. You have been selected for a special scholarship programme announced last week. You just have to sign a form and pay a nominal fee to qualify for it.
Hi, Irda has found out that your current insurance policy is giving you poor returns. As one-time relief to you, we are allowing you to surrender your existing policy and shift to a better product. You just have to pay a nominal fee for this. You also will have to submit some documents..."
Many insurance policyholders have been getting similar calls from representatives of the Insurance Regulatory and Development Authority for a while now. In fact, the insurance regulator was forced to issue a public alert recently, cautioning policyholders against falling for such sales pitch by the so-called 'Irda representatives'. The regulator had sent out a similar note even in 2010, when such incidents first came to light.
For the record: Irda, or its representatives, do not get in touch with individuals for selling insurance policies. "Agents, who find it difficult to meet their targets, indulge in various malpractices to trap gullible consumers. They pose as bank relationship managers, agencies which can help businesses get loans against insurance policies, Irda officials, and so on," says consumer activist Jehangir Gai.
The modus operandi
According to Irda, people have been "receiving calls from individuals who claim to be representatives of Irda and offer insurance policies of different insurance companies with various benefits — such as offering of scholarship along with policy, etc".
Some fraudsters are also offering special bonus or 'interest-free' loans on life insurancepolicies. This apart, earlier this year, some private life insurers, including ICICI Prudential Life, HDFC Life and Reliance Life, had lodged complaints with the Economic Offences Wing (EOW) against fraudulent callers, asking policyholders to surrender their existing covers and switch to policies that fetch better returns.
"I have heard of cases where individuals who already have policies have received calls from agents who highlight the poor performance of their existing policies. Then they get lured into buying new policies after surrendering the existing ones," says Gai. What policyholders are not told is that they lose out on a huge amount of money in the form of surrender charges when they close their existing policy.
Moreover, since other charges are deducted from their premium in the initial years, the amount they receive upon surrendering the policy could be lower than total premiums paid. "These cases have emerged as people have procured databases of customers and mostly these are small-time brokers making these calls with false promises to customers," informs Rajit Mehta, executive director and chief operating officer, Max Life Insurance.
Be careful while responding
Fraudsters are using every technology — be it emails, SMS, calls — to rob unsuspecting individuals. At one point in time, they were sending emails posing as RBI officials, seeking details of bank accounts. This has forced RBI to caution individuals against such phishing mails from fraudsters posing as RBI officials.
Even banks are constantly educating their customers against sharing internet password, ATM pin, and so on to anyone passing as bank official. If you get greedy and oblige these elements, you may stand to lose both money as well as your peace of mind. If they manage to get your bank details, they might clear off your account. If you act on their tips on insurance policy, you may end up terminating a policy unnecessarily, or buying products that are not suited for you.
Never share your bank account details, pins and passwords with anyone. As for insurance agent, make sure you check his credentials at the first meeting itself — even if you know him or her personally.
"Check the valid identification like Irda licence. Find out whether the plan is present on the insurance company's website and if the benefits, as explained by the agent, are in line with the details on the website. Fill the proposal form yourself and do not just sign along the dotted line," says Girish Malik, vice-president and head of life insurance at Xperitus Insurance Brokers.
You should also ask for the agent code and verify it with the insurance company. Also, you must retain a copy of the proposal form that you have signed.
Hi, Irda has found out that your current insurance policy is giving you poor returns. As one-time relief to you, we are allowing you to surrender your existing policy and shift to a better product. You just have to pay a nominal fee for this. You also will have to submit some documents..."
Many insurance policyholders have been getting similar calls from representatives of the Insurance Regulatory and Development Authority for a while now. In fact, the insurance regulator was forced to issue a public alert recently, cautioning policyholders against falling for such sales pitch by the so-called 'Irda representatives'. The regulator had sent out a similar note even in 2010, when such incidents first came to light.
For the record: Irda, or its representatives, do not get in touch with individuals for selling insurance policies. "Agents, who find it difficult to meet their targets, indulge in various malpractices to trap gullible consumers. They pose as bank relationship managers, agencies which can help businesses get loans against insurance policies, Irda officials, and so on," says consumer activist Jehangir Gai.
The modus operandi
According to Irda, people have been "receiving calls from individuals who claim to be representatives of Irda and offer insurance policies of different insurance companies with various benefits — such as offering of scholarship along with policy, etc".
Some fraudsters are also offering special bonus or 'interest-free' loans on life insurancepolicies. This apart, earlier this year, some private life insurers, including ICICI Prudential Life, HDFC Life and Reliance Life, had lodged complaints with the Economic Offences Wing (EOW) against fraudulent callers, asking policyholders to surrender their existing covers and switch to policies that fetch better returns.
"I have heard of cases where individuals who already have policies have received calls from agents who highlight the poor performance of their existing policies. Then they get lured into buying new policies after surrendering the existing ones," says Gai. What policyholders are not told is that they lose out on a huge amount of money in the form of surrender charges when they close their existing policy.
Moreover, since other charges are deducted from their premium in the initial years, the amount they receive upon surrendering the policy could be lower than total premiums paid. "These cases have emerged as people have procured databases of customers and mostly these are small-time brokers making these calls with false promises to customers," informs Rajit Mehta, executive director and chief operating officer, Max Life Insurance.
Be careful while responding
Fraudsters are using every technology — be it emails, SMS, calls — to rob unsuspecting individuals. At one point in time, they were sending emails posing as RBI officials, seeking details of bank accounts. This has forced RBI to caution individuals against such phishing mails from fraudsters posing as RBI officials.
Even banks are constantly educating their customers against sharing internet password, ATM pin, and so on to anyone passing as bank official. If you get greedy and oblige these elements, you may stand to lose both money as well as your peace of mind. If they manage to get your bank details, they might clear off your account. If you act on their tips on insurance policy, you may end up terminating a policy unnecessarily, or buying products that are not suited for you.
Never share your bank account details, pins and passwords with anyone. As for insurance agent, make sure you check his credentials at the first meeting itself — even if you know him or her personally.
"Check the valid identification like Irda licence. Find out whether the plan is present on the insurance company's website and if the benefits, as explained by the agent, are in line with the details on the website. Fill the proposal form yourself and do not just sign along the dotted line," says Girish Malik, vice-president and head of life insurance at Xperitus Insurance Brokers.
You should also ask for the agent code and verify it with the insurance company. Also, you must retain a copy of the proposal form that you have signed.
