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Life Insurance - What are the rights of an insurance policy buyer?

29 Aug 2012

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It is a known fact that one cannot foresee what future has in store! Life is so uncertain that one cannot predict whether the next moment he/she will be alive or not. Keeping this perspective in mind, it is better to be prepared to face future uncertainties ahead! An excellent way to do this is to own an insurance plan. Remember it works best for those who are aware about their privileges as an insurance buyer.

Awareness about insurance comprises of the various rights that are provided to the buyer. A review made by leading finance analysis company shows that the level of awareness of rights among policy holders is quite appalling. This article is dedicated to provide information regarding the rights one possesses as an insurance buyer.

Be aware of your rights as an insurance policy holder

Portability of a plan, what is free look period, within how many days one can settle the claim, etc are some of the questions that every policy holder must know about. To help you ask the right questions here is a check list approved by the IRDA for you to get started!

Right to get information on your insurance policy

As per the guidelines stated by IRDA, all policy holders must provide the information they ask regarding their insurance scheme by the insurer. A buyer possesses the right to enquire about all the relevant information including the benefits that he/she is liable to get from the purchased policy. To certify whether the buyer is aware about necessary information and features of the policy or not he is provided with a certificate form that is to be filled by him. IRDA guidelines clearly disclose that when a policy is sold, the particular insurance firm or one of its agent must present all the required information about the scheme to the buyer, so that he/she can foresee whether the plan is in his interest or not.

Rights regarding the Termination of Insurance Policy

If due to some reason, the policy holder is not pleased with the insurance scheme after buying it, he/she holds the right to cancel it within 15 days of inception and is also liable to get the whole amount back. In such a situation, insurance companies deduct only the surrender charges. Most buyers remain unaware about this right and often face difficulties in such cases. Most of the complaints regarding surrender of policy are only due to one reason and that is, the buyer doesn’t get what was promised at the time of purchasing the policy. Some agents make false commitments just to tempt the customers into purchasing a policy, so it is critical for the buyer to do his own research online and also ask friends and associates about the scheme before going ahead with it!

Rights regarding Payment of Premium

Some policy holders find it difficult to pay premium in lump sum. So IRDA has defined a right for those policy holders to change the frequency of payment of premium. To change the amount of premium one can apply in the commencement of the respective policy year.

Rights regarding Filing a Complaint against any Insurance Company:

Insurance Policy buyer holds the right of filing a case against an insurance company if he/she finds anything wrong in the procedure. Such types of issues arise mostly when a company over charges the premium from their policy holders or makes excuses at the time of maturity. In case such a situation should arise buyers often fail to take up the issue and file a case against the insurance company as no one wants the hassle of taking up such a responsibility. There is also common myth that it is next to impossible to win a case against any insurance company. If the intentions are correct and the reason to file a case is legally valid then the insurance company in question will surely be pulled up by the IRDA. To file such a case, one can contact IRDA on IGMS. Consumer forums can also assist in this regard.

There are several fraudulent companies existing in the market today and if one’s research and understanding of one’s rights is not sound, it can be easy to get deceived. If any insurance agent makes excuses in showing policy documents, then one must force them to do so as it is one of the primary rights given to buyer. To spot any discrepancy, it is always recommended to go through the whole policy documents or take the assistance of an insurance expert. An insurance policy is supposed to bring financial relief in one’s life and the benefits can be better utilised if everyone who wants an insurance policy is aware of the rights they are entitled to!