The Public Response Against Helplessness and Action for Redressal (PRAHAR) has complained to the Ministry of Finance against an online insurance aggregator’s alleged misleading advertisement on its website.
In a letter to Finance Minister Nirmala Sitharaman, the NGO said that it has, since December 2022, written multiple times to the Insurance Regulatory and Development Authority of India (IRDAI) to draw attention to a marketing programme run by the insurance aggregating website titled ‘Become a Crorepati by Investing Right’.
A click on the ‘Investment Plans’ tab leads to a life insurance policy promising a maturity value of over Rs 1 crore at the end of 20 years through a systematic investment plan (SIP) of Rs 10,000 per month for 10 years, which amounts to Rs 12 lakh.
The NGO’s letter says the offer of such an attractive return cannot be realistic unless all the variable factors to remain unchanged for over 20 years. Therefore, this is a clear case of misinformation and deception on the part of the insurance aggregator, PRAHAR says.
Abhay Mishra, National Convenor and President of PRAHAR, said insurance policy intermediaries have become quite popular as they enable easy comparison of different plans, but it also leaves investors vulnerable to exploitation through misinformation.
An ongoing violation of insurance advertisement rule for over five years and inaction by IRDAI for months, despite complaints, points to systemic gaps in the insurance sector, particularly in the enforcement of well documented rules, he said.
The NGO has demanded the removal of the misleading advertisements, full refund with interest to investors, and levy of penalty on the insurance aggregator.