Can you return your life insurance policy?

Naval GoelPolicyx.comRajeev Mehta, 28, bought a life insurance policy from one of his friends Ajay Sinha, authorised as an agent of an insurance company. Due to his friendship with Ajay, Rajeev placed blind trust on him and did not ask some critical questions about the nature of the insurance plan. He issued the cheque towards premium in a hurry and received his policy document in a period of 7 days. Incidentally, his wife Sulakshna got to see the policy. Sulakshna, as a finance graduate, had an interest in insurance sector and she started reading the policy document. Naturally, it is a good practice to read the insurance policy document thoroughly. It is apparent and a widely known fact that the fine print of the policy document is not understandable by most people. But then there is no way out. Ignorance is not bliss! If you do not read it, then you run the risk of being caught unawares in case of certain conditions which you may not be aware of. Sulakshna did. She read the policy document and found some conditions which Rajeev was not aware of. For instance, the plan had a condition that the first year premium amount will not be deployed for investment and will be returned to the policy holder after the entire policy term. In their case, the policy term was 20 years. It was a sort of incentive for holding a policy for a long period, but consumers may not like it. This condition came out of blue for the couple. They were disappointed at this fact. Their agent, whom they called a friend, did not tell them about it – be it knowingly or unknowingly. There were several questions lingering in their mind. What if they want to surrender the policy before the period of 20 years? In this case, they had to let go off a large amount. Anyway now that they had made the payments and the policy was already issued, what can they do? The deal is done. They were feeling cheated. But, yes, there existed a solution. As per the instructions of the Insurance Regulatory and Development Authority of India (IRDAI), all the life insurance companies in India have to provide a Free-look period to consumers. This period is generally 15 days. That means, a consumer can return the policy to an insurance company within a period of 15 days of receiving the policy. The insurance company has to return the premium amount to the consumer without any hassles. The insurance company may request for feedback and reasons to return the policy, but, at the same time, no company can force or cajole the consumer to keep the policy. Consumer remains the king and his decision remains binding to the insurer, both legally and ethically. The insurance company is allowed to deduct usual administrative expenses which are general in nature. This includes stamp duty charges, courier charges, etc. These expenses are of few hundred rupees. Rajeev and Sulakshna exercised this option and returned the policy to the company. They received their premium amount back in the form of a DD within one month. This way they saved themselves from the frustration and disappointment of being duped and exploited. This option is indeed very useful and works in the interest of consumer rights. However, there are some conditions which one needs to take care of. They are as follows.•Inform the company well within the time period: It is very clear that one has to inform the insurance company within the specified period. A delay of even one day can make the insurance company reject your request. •Keep it in writing: You may call customer care centre of the insurance company concerned and share your intention to return the policy. But, it is always good to inform the company in writing and take an acknowledgement. You can quickly approach the branch office of the insurance company and take a receipt of your application in black and white. If you do not do this, there are chances that the company rejects your request after the free-look period.•Avoid involving agents: If you have made up your mind to return the policy, approach the company’s branch office directly. There is no point in involving the agent. He may try to manipulate things so that you retain the policy. No insurance company in India is supposed to deny the instructions of IRDAI. But if in case you smell the rat and feel that the company personnel or agent are just not acting fair, you can take an action. You can file a formal complaint with the ombudsman of insurance company. Such complaints are addressed by independent officials and senior management of the company. There are all the chances that your issues get resolved in a transparent manner.However, make sure that you have followed the desired guidelines. If you are caught on the wrong foot, then you may have to bear the outcomes of the same. What’s more, if you still do not feel satisfied, you can take a step further and file a complaint with the IRDAI. It is quite easy to do it. You can do it online. IRDAI’s Integrated Grievance Management System (IGMS) resolves consumer complaints quite efficiently. Filing a complaint with the Consumer Court should be the last resort. Overall, you can expect fairness and transparency in the entire process.