Why insurance sales persons make false promise?

[Nilesh]

This is to update to all the new buyers that before buying any health insurance policy, the sales persons make big promises. But, hide the hard fact. I had a bitter recent experience. In the month of Nov’2010, my father got admitted in a hospital for one day under the advice of resident doctor. When I submitted the claim to the insurance company, the claim was promptly rejected stating that the patient could have been treated as outpatient (OP) case and hence, the claim could not be settled. Now, I fail to understand, how an insurance company can overrule the advice of a qualified doctor, when all the reports and bills are available to them?

Similar Threads:

• Please advice me - how to make my insurance portfolio?
• Buying another health Insurance - how I will make the claim from two companies?
• Insurance Policy for dumb, deaf and mentally retarded persons?
• SWP way to make payments to Term Insurance Policy Annually.
• Is there any discount in motor insurance premium for disabled persons?

[Madhura]

Nilesh - I agree with you that sales person makes false promise. It's always advised that please read the policy document with policy wording carefully. If you have any doubt please check with the sales person/agent and/or customer care of the insurer. Now there are lots of online communities available to discuss, raise your docubts their. Don't buy blindly.

[>take]

Now, I fail to understand, how an insurance company can overrule the advice of a qualified doctor, when all the reports and bills are available to them?

The insurers and TPAs have inhouse doctors, who assist them in case of any claim. So they are qualified enough to judge.

[PolicyWala]

Just wants to quote Moneylife article on the same lines – (Source - http://www.moneylife.in/article/insu...ling/2238.html)

“Financial literacy in the distribution channel itself is the main cause of mis-selling. It leads to underinsurance and improper coverage for the insured. The problem lies in a lack of training on part of the employer for need-based policy selling.” He further added that inactivity of agents is another cause for concern. He said, “There are three million agents in the market currently. But only 20% of these are productive.”
Nitish Asthana, Senior VP, Direct Distribution and Telcassurance, Bharti AXA Life Insurance

Is there a way to curb this menace?
According to Sanjiv Bajaj, joint MD, Bajaj Capital, the proposed 2.25% cap on insurer’s premium charges will help arrest mis-selling. He said, “We can’t control mis-selling by doing micro things. We have to do macro things like having a 2.25% cap on premium charges, which will make a lot of difference.” He attributed mis-selling to a lack of long-term relationship orientation with the customer. “Mis-selling is happening more at the employee level and not the agency level, as is the misunderstanding. This can only happen when there is one thing missing in the relationship, and that is relationship. If there is emphasis on having a relationship, then mis-selling cannot happen as the advising agent wants to thrive on the life-time value of the relationship.”

[Nilesh]

I would suggest if the insurance comission for all the insurance products are same then the insurance sales person don't push one product. I know it is difficult but to me this is the answer.

[dominate]

I would suggest if the insurance comission for all the insurance products are same then the insurance sales person don't push one product. I know it is difficult but to me this is the answer.

How can you fix same insurance commission for all the products? Every product has its own risk coverage, terms and underwriting rules.

[Nilesh]

How can you fix same insurance commission for all the products? Every product has its own risk coverage, terms and underwriting rules.

I am asking for similar products like term, ulip etc.

[Sanjay]

When your bread and butter comes from the commission, you use are sort of methods to earn more. It's also the duty of the buyer to check what he is buying and when IRDA also providing him various methods like free look period and ombudsmen etc. use them if wrong product sold to him.

[Sanjay]

1. Doesn't have time to research the market
2. Understands that cheapest is not best value
3. Not able to understand the insurance terminology
4. Will buy the cheapest brand they recognise

[Expert]

When your bread and butter comes from the commission, you use are sort of methods to earn more.

I am not agree with your views. It is saying like - 'builder build a building with only sand and no cement to earn more'. Sales person is not doing the justification with the job for which he is hired. Sales person has to take proposer profile and goals in mind and advise him the best product to suit his need.