Key Points
They should look at whether the coverage that is being suggested to them would be sufficient or not..
Another mis-selling that is happening is where you conceal important information and what I mean by conceal important information is let us say as a consumer or as a user, somebody who is looking to buy a health insurance, you tell your agent upfront that these are your pre-existing diseases, these are your medical conditions..
Now what will happen is that the policy will get issued, everything will look hunky-dory to the customer that hey I have got the policy but God forbid, if something were to happen in future and at that point in time if the insurance company gets to know about your pre-existing disease which more than likely they will get to know because the doctors or the hospital who are going to treat you would essentially ask you for your medical history and as a user since you were honest earlier, you would definitely be honest with the hospitals and the doctors that hey these are the medicines that I was taking, these are the ailments which I had previously and the moment that gets recorded in your file and the file goes to an insurance company for a claim processing, your claim would get rejected...
So from an agent perspective, if you are only allowed to sell insurance from one insurance company, there is a chance that the agent might try and sell you a particular product only and that product might not be the best product in terms of your financial or protection needs; so that is one difference...
If your annual income is Rs 10 lakh and the agent is suggesting that you buy a term insurance only of Rs 25 lakh, then that is a red flag because if anything were to happen to that individual, would Rs 25 lakh of corpus be sufficient for the family to survive post an event?..
