IRDA bans sale of insurance products over phone

This time there's some good news for insurance products buyers. Insurance Regulatory and Development Authority of India (IRDA) made a smart move this time in favour of millions of buyers before 2-3 days.

Insurance Regulatory and Development Authority of India (IRDA) banned selling of insurance products over phone. According to Insurance Regulatory and Development Authority of India (IRDA), in last 6 months over 10% of the products sold were mis-sold. The common sales pitches used for mis-selling can be found here.

This will be a huge respite for uninformed, innocent people who were called by Tele Sales Representative of the insurance companies and were given insurance products which the buyer had no information about. I have come across many cases where the person was called in the insurance companies office with his/her spouse and they were given some gift worth 100 bucks and were sold insurance products worth 50,000 bucks. And as the Indian women are very attached to free gifts, the hubby had to buy that 50,000 premium's insurance for that non-worthy 100 bucks gift.

Another instance of mis-selling over phone was more of like a fraud. The individuals were given minute details over the phone, and that too only positive points, and were asked for credit card details. The premium amount was deducted from the credit card and then the detailed documents were sent to the consumer. As we all know, no one reads the full documents of the insurance. The problem arises when the claims are made. The insurance company denies claims on basis of many faults in the form and the loser is consumer always.

This ban will be very beneficial to the consumers and its a reason to cheer for all of us!!!

As a Tip, I would suggest all of my readers to read the documents carefully before buying any insurance product. You can always ask for the product brochure. You can call the toll-free number any time, 24 hours a day. You can ask for the help of a good financial advisor to understand the product better. I would really love to hear, if you don't invest without studying the insurance product fully. Wish you all the best and a financially independent life.