Top 5 biggest life insurance myths

Breaking News - There are several misconceptions about life insurance. It is a popular notion that older or married individuals with kids should invest in one, or that the insurance only offers post-death benefit. Here we debunk some of the biggest life insurance myths…

Life insurance policy is critical to any financial planning. Yet it is never prioritized and is often considered complicated to decode. But it is always a good idea to invest in life insurance, more so sooner than later. Especially, since not having one when you need it can be devastating.

While there are quite a few common myths about life insurance myths, here is a list of the five biggest ones.

Myth 1: Single, without dependents. I don't need coverage

Myth 2: Too young to think about coverage

Myth 3: Only men need life insurance

Myth 4: Insurance is of no use unless you die

 

Myth 5: Better to invest the money rather than lock it up in life insurance of any kind

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Debit, credit card frauds: Banks will insist on an FIR

Getting a bank loan or credit card, buying an insurance policy or investing in a mutual fund is very easy today, given the several points-of-sale available. These include agents, online intermediaries and the bank/ insurance company/ fund house directly. But, what happens when you have to lodge a complaint with regard to deficiency of service or mis-selling? Should you approach the agent/intermediary or the company directly? What is the time-frame for the complaint to be resolved?

In addition to complaints on deficiency, insurance complaints include fraudulent calls claiming to be representatives of the Insurance Regulatory and Development Authority of India (IRDAI) and offering of policies of different insurers with various benefits.

In case of banking products, the common complaints include misbehaviour of collection agents for recovery on overdue outstanding credit cards/ loans, delay in resolving debit/credit card complaints pertaining to billing or disputed transactions, dispute/communication relating to interest rate on loans and advances, says Anand Aras, CEO, Banking Codes and Standards Board of India.

Mis-selling complaints include those saying the agent had promised a certain amount of dividend while selling the MF, but the actual payout was lower. Or the agent had not mentioned the lock-in period while selling the fund, says an official of a fund house. 

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After passenger cover, railways plans baggage insurance

After successfully rolling out insurance for passengers who book tickets online, the Indian Railways is planning to introduce theft insurance. Under the proposed scheme, travellers can get a cover for all their baggage, electronic items and other valuables.

The scheme would cover incidents like robbery and dacoity. Indian Railway Catering and Tourism Corporation (IRCTC) has sought insurance companies' views on the issue.

The existing system doesn't provide any provision for compensation in case of theft during a rail journey. According to the rules, a passenger can approach the train conductor, coach attendants, guards or escorts, in case of a robbery or dacoity. In such cases, railways officials normally help passengers file a first information report (FIR) with the police station concerned. However, the stolen goods are rarely recovered. And to claim normal theft insurance, passengers need a "non-traceable certificate" from police, which takes at least three months.

"IRCTC has asked us to look into theft insurance possibilities and submit our views. Their idea is to provide cover for all items, including laptops, mobile phones and other valuables," said a top executive of a Mumbai-based insurer.

The initiative comes on the back of the passenger insurance scheme introduced by the railways on September 1, which became an instant hit among online ticket buyers. Till now, the scheme has attracted over 6 million buyers with about 330,000 passengers choosing it everyday.

Once IRCTC gets insurers' views on theft cover, it will take up the matter with the railway ministry for clearance. IRCTC Chairman and Managing Director A K Manocha said railways is also considering providing insurance cover to passengers who buy tickets offline or travel without reservation. "We will have to invite fresh tender if the scheme gets extended to  read full story