Unsolicited insurance policies could land you in trouble

Hyderabad: If you receive an unsolicited insurance policy, the first thing you should do is to return it through registered post. Otherwise, you could be in a soup, according to experts.

Of late, the issuance of insurance polices without the consent of policy holders or proper proposal forms is on the rise.

“Though we cannot disclose the names of the companies involved in this practice, there has been a significant, undesirable rise in these instances,” a senior IRDA official told Business Line here.

Putting aside violation of the Insurance Regulatory Development Authority (IRDA) norms by the insurers, this practice also means trouble for a customer/policy holder. An unsolicited insurance policy could be more dangerous than an unsolicited credit card, pointed out Surya Roy, Executive Director, Life Insurance Corporation of India.

Something fishy

“Firstof all, if you don’t return it within 15 days, you will automatically become a party to an insurance contract, the details of which you are not fully aware of due to the absence of a proposal form. Secondly, even if you wish to subscribe to it, there could be something fishy about the nominees,” he said.

Keeping the policy and not paying the premium also may not bail one out as somebody else could be paying for you with some vested interest.

According to A. Subramanian, Regional Manager (Andhra Pradesh and Karnataka), SBI Life, a policy without proper proposal norms could lead to serious legal complications. “As insurance has serious, long-term implications for an individual/family, unsolicited insurance polices can defy the very purpose of insurance,” he said.

The unhealthy trend is visible in the general insurance segment as well, according to S.V. Mony, Secretary General, Life Insurance Council.

“One should ensure that an unsolicited policy is properly returned within 15 days from receipt. Then, there will not be a big issue,” he said.