Common myths and the reality about insurance
Posted Sunday, June 17 2012 at 13:25
If there is anything that bothers potential consumers of insurance products, it’s whether information received during presentations by sales agents corroborates the insurance policy of the firms they represent.
Reason? Most of the promises given during the presentations are too sweet to believe.
With the rising competition for clients among a growing number insurance companies, misrepresentations have become common place. The vice comes in various forms.
A misrepresentation might occur when one makes a presentation believing that what they are saying is correct. For instance, an inexperienced sales agent with little product knowledge could mislead potential clients.
Misrepresentation can also be fraudulent where dishonest sales agents, out to make high commissions at the expense of clients, make false presentations.
As a potential policy holder, you have the responsibility of identifying and rejecting products if you suspect that you are being duped.
Below are common misrepresentations during product presentation on insurance that you need to take note of.
Life insurance provides financial compensation when you lose your job.
Most potential clients inquire about what would happen if they lose their jobs after they have acquired insurance cover. Dishonest agents are not comfortable with giving a truthful answer to a potential prospect who is at the brink of signing for a cover.
Instead, they often give a false promise that the policy provides for upkeep compensation. Others declare that during job loss one is excused from premium payments until they secure another job.
As a matter of fact, life insurance cover provides benefits to dependants of the insured person upon his death. The insurable risk in this case is death, with the exception of that which results from suicide.
Therefore, when you lose your job you will not be entitled to any financial compensation from your cover since this is not provided for.
During this period, unless you make alternative arrangements with your insurer, any default on payments of up to three months will render your policy lapsed.
The second misconception is that a life cover provides compensation in case of an accident.
The insurable risk in life insurance is plainly death and not injury.