Fooling customers for the sake of business is not new. But, when it comes to the insurance sector, this practice is more common than you think. Insurance agents almost desperately try to sell insurance policies to customers, and their words consist of a ton of lies and half-truths. If you don’t want to fall into their trap, you must be aware of the common lies that insurance agents use to trick potential customers into buying expensive insurance products.
However, it’s not the insurance agents who should be put on blame. They are bound by their respective jobs, and work under tremendous pressure from their bosses to meet targets. And, it’s the insurance companies which actually push the agents to sell expensive insurance policies to customers, either by hook or by crook.
Here is a list of the six topmost lies that insurance agents use while selling policies to unsuspecting customers.
1. “This is the best policy for You.”
A few words that can enthrall any novice customer, this is the most commonly used technique often used by insurance agents to sell a particular insurance policy. The moment they see a customer, they act no less than astrologers who seem to have known all the details of the customer, and then recommend a policy without actually knowing anything about them.
But in reality, this is nothing but a typical marketing trick used to fool the customers and make them convinced to buy the recommended policy. The insurance agents receive high commissions from the company if they get successful in the same.
Ideally, any financial advisor should recommend a product only after assessing the goals, age, and risk appetite of the customer.
2. “It will give you assured returns of 15-17 per cent per annum.”
A very notorious technique to make the customers fall prey, insurance agents often make such statements while explaining facts about the policy. The stated number may differ from agent to agent, but it only gets higher and the actual amount is never revealed to the customers.
In reality, they either use any number popping on their heads without bothering if the policy has ever achieved such returns or not, or state the numbers for traditional policies that invest in government securities, some of which have failed to beat inflation even.
You must stay aware of the fact that only equities generate such returns in the long run. And the average returns for the policies recommended by the agents are no more than 5-6 per cent, which is 3 times lesser than what they promised.
Always ask your agent for written declarations if he ever makes such a statement.
3. “You need to pay once for this policy.”
This is the current trend among insurance agents who try to project the regular insurance policies as single premium ones, hence taking advantage of the situation where customers skip reading the big policy document. And the poor customer realizes this only when he receives a reminder for the second premium.
Getting hold of the particular insurance agent who sold the policy may take a lot of time, and the worse is if they shift to some other company by then. So from next time, always be careful in knowing the type of policy you’re about to purchase before worrying about how it will perform.
4. “This policy is for a limited time period.”
This has been a common lie used by many insurance agents who are too desperate to sell their insurance policies. And, you must always keep in mind, stating that a policy would vanish after some time is nothing but a wily marketing tactic to successfully befool the customers.
There are tons of policies in the market waiting for you. Even if a policy is going to expire soon, you do not need to hurry and buy it. Always compare insurance online, acquire every required knowledge, and then only advance to buy it.
5. “Term insurance is a total waste of money and you won’t get back anything.”
Every time you talk about term plans to an insurance agent, he will tell you that you won’t get anything back in return once the term is over.
But you must know that, term insurance has been specifically made to serve the insurance needs rather than investment needs. And it is your best bet when it comes to protecting your family. Term insurance online always gives greater sum assured for a cheaper premium.
Do not get lured by the ‘returns’ aspect mentioned by the agent. Always calculate your insurance needs before selecting a policy.
6. “Online insurance policies have bad settlement record.”
This applies mostly to those insurance agents who are trying to sell offline term plans. If you argue that buying insurance online is more convenient for you and it gives greater sum assured at a lower premium, they will immediately speak about claim settlement.
But the actual fact is that, IRDA publishes claim settlement ratios of insurers who offer online as well as offline insurance. Hence, there is no base to state that online insurance policies have bad settlement record.
Buying an insurance policy online has many advantages. It allows you to scrutinize various insurance products and choose the plan that suits your requirements. Moreover, when you compare insurance online, you will also be able to see whether any add-on feature is available with the policy or not. Nowadays, many web aggregators have made insurance buying easier by allowing customers to compare insurance online on their websites.
It is always better to do every possible research before calling upon an agent, check the claim settlement of the company beforehand, and fill up your forms by yourself instead of leaving it upon the insurance agent. Anybody may attempt to fool you at any time, but whether you’ll get fooled or not ultimately depends on you.