Statistics show that in India, for every three insurance policies purchased, at least one gets lapsed in the second year because of non payment of premiums.
The main reason why this happens is customers are not interested in paying the recurring premium.
Most people cancel their policies when they find out that the profit offered to them is not keeping up with the promises made when the policy was purchased. Some people are not able to bear the burden of the cost of the premium. Most people also purchase policies not for their needs, but for the sake of friends or relatives who market the policies.
1. Analyze the need for purchasing a policy
This would prevent waste of time and also help people to cope with emergency situations in life.
2. Be aware of mis-selling
Wrong policies, or worse, worthless schemes, are pushed by sales personnel in order to enhance their targets for the month. Most policies are sold by creating a sense of insecurity in the customers or by enticing them with huge profits.
3. Never purchase policy influenced by sales people
4. More than returns, life insurance should be considered as a backup for the family in case of mishaps
5. Avoid schemes that are too good to be true
6. So do not be pressured by limited-time offers
One has to understand that as long as companies exist, they would be coming out with policies that benefit the customers.
7. Use option to return the policy
Ensure that whatever is filled in the policy forms are checked properly and if the details that one has given are not reflected in the policy papers, return the policy. Insurance policies can be returned within 15 days if the terms are not suitable to the customer.
8. Use options to complain if needed
You can also complain to the insurance ombudsman if the worth of the policy is up to Rs 20 lakhs. One can also complain to the insurance regulator, IRDAI.