A senior insurance executive says mis-selling isn't widespread in general insurance. According to reporting by Deccan Herald, IFFCO-Tokio director Alpana Singh made the point.
For you, the message is simple. Most policies are sold honestly, but you should still check what you're buying. Read the papers before you pay.
Key takeaways
- Mis-selling means a policy is sold with wrong or missing facts.
- An insurer's director says it isn't widespread in general insurance, as reported by Deccan Herald.
- That doesn't mean every agent or bank desk gets it right.
- You can protect yourself by reading the policy and using the free-look period.
- Complaints can go to the insurer first and then to the regulator, IRDAI.
What mis-selling means in simple terms
Mis-selling happens when a seller pushes a product that doesn't fit your needs. It also covers hiding costs, limits or exclusions. Exclusions are things the policy won't pay for.
General insurance covers health, motor, home and travel. These policies usually run for one year and then renew. That makes them easier to compare than long life plans.
The claim in the news is about how common the problem is. It isn't a claim that the problem never happens. Both things can be true at the same time.
What mis-selling can cost you
Say a family buys a health policy with ₹10 lakh cover. The base premium is ₹12,000 a year. A seller adds an extra rider for ₹3,000 and doesn't explain it. A rider is an optional add-on.
| Item | Yearly cost | Cost over 5 years |
|---|---|---|
| Base health policy | ₹12,000 | ₹60,000 |
| Add-on you didn't need | ₹3,000 | ₹15,000 |
| Total paid | ₹15,000 | ₹75,000 |
These are example figures, not real quotes. The extra ₹15,000 is a quarter of what the base cover costs over the same years. That's real money for a family budget.
Sometimes insurance also gets bundled with a loan. Check your personal loan papers for any insurance line. In most cases it's optional, so ask before you sign.
Who is affected
Anyone who buys insurance can be affected. Some buyers face more risk than others.
- First-time buyers who don't know the terms yet.
- Senior citizens who may be pushed towards costly plans.
- People who buy over the phone or at a bank counter in a hurry.
- Borrowers who get insurance added at the time of a loan.
If you shop on your own and compare plans, your risk is lower. The risk grows when someone else decides for you.
What to do before you buy
You don't need to be an expert. A few simple steps go a long way.
- Ask for the full policy wording and read the exclusions.
- Check the waiting period, which is the time before some claims are paid.
- Compare at least three quotes for the same cover.
- Ask the seller to put promises in writing.
- Use the free-look period, usually 15 to 30 days, to cancel if it doesn't fit.
If you feel you were misled, write to the insurer's grievance team first. If that fails, you can approach the regulator, IRDAI. Keep emails and receipts safe.
For more updates like this one, visit our news hub.
Frequently asked questions
What is mis-selling in insurance?
It means selling a policy by hiding facts or giving wrong promises. It can also mean selling a plan that doesn't suit the buyer.
Does this news mean my policy is safe?
Not automatically. The statement is about the whole sector. Your own policy is safe only if you've read and understood it.
What is the free-look period?
It's a short window after you buy a policy. You can return it and get your premium back, after small deductions.
BankCreds analysis
The claim is about averages, not about you
A sector-wide view doesn't protect your own purchase. If one agent oversells to you, the average means nothing. The loss is yours.
Take a 58-year-old buying health cover. A wrongly explained waiting period can mean a ₹3 lakh hospital bill goes unpaid in year one. That one gap can cost more than ten years of premiums.
Don't read this news as a reason to relax. Don't read it as a reason to panic either. The real change for you this week is small: ask for the policy wording before paying. Check exclusions and waiting periods first. Ten minutes of reading is cheap compared with a rejected claim.
This section is BankCreds' own assessment of what the development means for Indian borrowers and savers. It is independent commentary, not part of the source reporting above.
Sources & references
- Deccan Herald — originating report https://www.deccanherald.com/business/companies/mis-selling-not-widespread-in-general-insurance-segment-iffco-tokio-director-alpana-singh-4179113
- IRDAI — Insurance regulator that oversees insurers and handles policyholder complaints https://irdai.gov.in/
Source links are shown as plain text, not clickable links. Copy a URL into your browser to read the original report.
Editorial note & disclaimer
How this was reported. The development above is attributed to the source or sources listed. BankCreds does not independently verify a third party's reporting; where a figure or a regulatory position is stated as fact, it is either attributed or drawn from the regulator's own published material. Everything under "BankCreds analysis" is our own assessment.
Rates and figures. Interest rates, per-gram values and premium bands quoted here are indicative, move daily, and differ by borrower profile, city and lender policy. Confirm the final number with the institution before you act on it — the sanction letter or policy schedule governs, not a news report.
Not financial advice. This article is general information for an Indian audience. It is not investment, tax, credit or insurance advice, takes no account of your circumstances, and BankCreds is not a lender, broker, distributor or advisor. Consider speaking to a SEBI-registered investment adviser or a qualified professional before acting.
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