Big time insurance companies are taking policy holders for a ride after promising them manna from heaven, according to policy owners who feel let down by the volte-face made by these insurers after extracting the entire premium amount from them.
V Hariharan, a self-made entrepreneur from Perumbavoor in Kerala who has settled down in Mumbai, was shocked to get a curt message from his insurer Max Life stating that ‘due to fund value being equal to or less than one annual target premium, your Max Life policy has been terminated and refund of Rs 50,000 has been initiated’.
Hariharan who had paid Rs 5,00,000 as premium over a period of ten years starting for 2007 and which ended in 2017 had been assured by the Insurance Advisor of Max Life that the former’s nominee would get Rs 12,50,000 in 2032.
On receipt of the message, Hariharan tried to contact Vijay Wadabalkar, the fund advisor, to find out what was wrong with his policy. He was told by Wadabalkar that the entire fund value went as mortality charges. “Mortality Charge is the premium amount you pay to get life coverage from Insurance Company,” was the message received from Wadabalkar who had left the insurance company in search of greener pastures.
The Fund Advisor's responsibility ends once the customer enrols in the scheme. The company is silent about what happened to the premium paid by policy owners like Hariharan. Having failed to elicit any information from Max Life or a clear explanation from the fund advisor, Hariharan has approached the Insurance Regulatory and Development Authority, the body that supervises the businesses carried out by private insurance companies.
“I have taken the policy in year 2007 and the full premium on instalments had been paid uninterruptedly over a period of ten years till 2017. The total accrued premium paid to the above policy is around Rs 5,00,000/- and the settlement amount received is Rs 50,006/- which I have deposited in my bank account under protest and this has been intimated to Max New Life insurance company. But the surprise termination and unethical settlement amount initiated by Max New Life has disappointed me. The settlement amount of Rs 50,006/- is just 10 per cent of my hard earned money invested with the said insurance company,” said Hariharan in his plea to IRDA.
He is yet to get any reply from the IRDA, the body to safeguard the interests of the investors and policy owners. Messages sent to Max Life seeking their comments remained unanswered.
IRDA executives have a much alarming information. “This is just the tip of the ice berg. A number of insurance companies mushroomed in India in late 1990s and early 2000 which swindled billions of rupees from hapless subscribers only to make a vanishing trick. A thorough probe should be ordered into this insurance scam,” said a senior IRDA officer.
