Are you being cheated by your insurance agent? Find out

Almost 75% of the 1.68 lakh complaints received by the insurance regulator in 2012-13 related to malpractice, mis-selling and outright cheating. Know the yarns being spun to trick you:

Soon, these good plans will not be available.

While many insurance policies will be discontinued, they will be replaced by better, more customer-friendly plans and the p remiums could go down.

Pay service tax if you buy after 31 December.

This is another half-truth. Service tax is already payable on life insurance policies and private insurers are charging cus- tomers accordingly. It’s just that till now the LIC used to ab- sorb the cost and pay from its own coffers. But even the LIC will start collecting service tax on all new insurance policies from 1 January 2014.

Irda is distributing commission

Irda is a regulatory body and does not sell insurance. Despite complaints piling up on their doorsteps, very few companies have taken action against errant agents.

Your bonus is as high as the premium

There is a catch here. This bonus a ccrues to the policy but is paid at the time of maturity. Assuming an inflation rate of 8%, the purchasing power of a Rs 24 lakh bonus would have pared down to Rs 5.14 lakh.

Ulips continue to be as risky as before After Irda capped charges on Ulips in Sep 2010, they have be- come a viable investment. Though not as low-cost and trans- parent as mutual funds, they are significantly better.


(This article is a condensed version of one originally published on December 2, 2013, and may contain chronological references based on that date.)