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5 things to keep in mind while dealing with an insurance agent
Jan 11, 2011 | 184 VIEWS

Insurance agents have a very important role to play while purchasing an insurance policy. They are the key people who assist in guiding you to select the policy and also help you through the entire process from filling up the proposal form to submitting the documents as per requirement to medical test, if required to paying up of renewal premiums to filling for the claim whenever required. Thus, it has been said that the work of the insurance agent is not over till you are alive.

What are the qualities of a good Life Insurance Agent?

A good life insurance agent must have at least the following qualities:

Must have IRDA License: The most important characteristic of a life insurance agent is to have an insurance license to sell by the Indian Regulatory and Development Authority (IRDA) under some specific insurance company. Someone who doesn’t have a license is not authorized to be your insurance agent. So, you must look for someone who is licensed by the IRDA to be your insurance agent.

 

Must be Trustworthy: A life insurance agent is someone you should feel comfortable with. He or she should be trustworthy, especially if this is the person who is going to be handling your life insurance affairs after you’re gone. If he isn’t, how will you trust him to handle the financial concerns of your family in case of emergency when you are not there?

 

Must have Experience: It’s recommended that you look for a life insurance agent who has been working in the industry for at least five years or more and is committed to the industry as a career. What you want is an agent who is there for the long term and you know will most likely be there for your family after you’ve passed on.

 

Must be an expert to provide a customized policy: Life insurance policies aren’t exactly “one size fits all.” Your life insurance agent need to take the time to know about you, your family and your lifestyle needs to help you make an informed decision about your policy. There are many kinds of life insurance policies—from variable term life insurance to permanent whole life insurance to Unit Linked Insurance policies—and the right life insurance agent should be able to find the one most suitable for you according to your needs and requirements.

 

However, even if the Life Insurance Agent possesses all the above mentioned qualities and more, you must not trust the agent blindfolded. There are certain points that should be re-checked and confirmed at your end.

 

The most important 5 things that you MUST keep in mind, while dealing with a life insurance agent are:

 

Need Analysis: You must have your financial need and requirements in mind, so that you are not misled into purchasing a product which you do not require.

A proper need analysis is very important for you to understand the plan which best suits your requirement. So you must know what you need and by when, so that the life insurance agent will be able to provide an impartial solution to your requirements.

 

Research and Compare: Before you make up your mind about which product to buy and pay the cheque, do your own research so that you are sure you are purchasing what you need and not doing it impulsively.

Doing your own research and confirming the details mentioned by your agent is a very good practice and should definitely be followed. It not only removes all doubts from your mind, but also improves the confidence level for the product chosen.

Fill up the form on your own: You must fill up the form yourself, so that there is no chance of wrong information being given out as it may lead to trouble especially in case of emergency when you are not there!

 

Under Section 45 of Insurance Act 1938 states that if within 2 years of commencement or revival of the policy, the insurer get to know that there has been a non-disclosure or misrepresentation of material facts, then the insurer can call the policy null and void.

 

It simply means that if within 2 years the Insurance Company finds out that the policy holder has not stated the complete truth or has lied while filling up the proposal form for commencement or revival of the policy, then it can cancel the policy and decline the claim.

 

Thus, if a smoker had mentioned that he is a non-smoker and he dies even a natural death within 2 years of the policy commencement, then also the Insurance Company may repudiate or decline the claim on grounds of “non-disclosure” or “misrepresentation” of “material facts”, i.e. for not stating the complete truth or misstating information which is relevant for underwriting and risk assessment.

 

Thus, each and every question of the proposal form must be answered correctly and the form should be duly filled by the proposer himself and not anyone else, as he is declaring that he is stating the truth when he undersigns the same. Thus later, the proposal form would be held against him in case of any dispute.

 

Proof of form submission: Take a photocopy of the completely filled form just before submitting the same so that you have proof of what has been submitted and no additions/alterations are possible thereafter. If there are any changes that have been made without your consent, then you still have 15 days of Freelook Period after receiving the final policy is issued to get it sorted or cancel the same. Most insurance companies however do provide a copy of the duly filled proposal form along with the policy documents for the customer’s perusal. However, it makes a lot of sense to do so yourself so that in case of a dispute, you are equipped with the form that you have filled yourself.

Customer Care Number: In case of any confusion or clarification, speak to the customer care number of the insurer which is available on their official website. The customer care number is available on the official website of the company under the “Contact Us” tab. This is considered to be the last resort for the final confirmation of any promotions or offers or details offered by the company directly from the horse’s mouth!

Conclusion:

Thus, even though the life insurance agent may be god-sent and helps you immensely to choose a policy for you , but still you need to keep your ears and eyes open before you actually take the plunge. Doing your own research and being self informed is always beneficial and will also be of a great help in the long run.

Deepak Yohannan
Deepak Yohannan is the CEO of MyInsuranceClub. He enjoys writing on Personal Finance and contributes regularly on sites like Reuters & Moneycontrol. He is a strong proponent of online insurance and is often found pointlessly babbling about it!

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