Have you been mis-sold an insurance policy by your agent? The policyholder’s protection regulations on mis-selling are very clear and reflect customer orientation.
The insurer, while sending the policy to the policyholder, needs to inform him that he has 15 days from the date of receipt of the policy to review the terms and conditions of the policy (free-look).
Should the insured disagree with any of those terms or conditions, he has the option to return the policy stating the reasons for his objections.
He shall be entitled to a refund of premium paid, subject to deduction of proportionate risk premium, expenses incurred by the insurer for medical examination of the insured and stamp duty paid on the policy by the insurer.
In case of a unit-linked insurance policy, in addition to the above deductions, the insurer is entitled to repurchase units at the price prevailing on the date of cancellation.
The intimation of the free-look facility reaches the policyholder along with the policy bond. It is for the policyholder to make use of it. He should, therefore, give an acknowledgement that he has read the terms and conditions of the policy and write to the insurer in case of disagreement and return the policy.
When it starts The free-look period starts from the date of receipt of the policy by the policyholder. It is always safe to send an email to the insurer informing him that the policy has been received; that will give you and the insurer a record of receipt along with the date.
Read them A policy has different parts, such as the preamble, schedule, conditions, exclusions and privileges. Every part is equally important. Many policyholders criticise agents and insurers for not reading the policy, forgetting that the policy is purchased for their (policyholder and his family) benefit and not for that of the agent. Every contract has to be legal.
If one has kept a record of statements and promises made by the salesman or insurer’s official, it is always advisable to compare the conditions and privileges available in the policy with those. Or else, read and understand every aspect of the insurance cover given in the policy.
If you are not in agreement with the policy terms and conditions, the same may be communicated to the insurer immediately, and seek acknowledgement thereby.
Demand for refund of premium must be made in unequivocal terms; always go by written communication.
An email communication provides a record. As a consequence of the Insurance Laws (Amendment) Act, 2015 and the regulations of the regulator, many terms and conditions appearing in new policies are likely to be different from those appearing in the older policies.
Hence read and understand fully and act. Those 15 days are very important.
The writer is President, Society for Promotion of Legal and Insurance Awareness