5 Ways to Spot a Bogus Insurance Policy
A lot of times, a policyholder may not even know that the insurance policy is fake until the person tries to make a claim from the insurer. By the time the person realises it, it's already too late. Therefore, as a consumer, you should always stay alert and look out for red flags so that you won't end up in a dire financial situation.
Here are five tips to ensure that you are dealing with a legitimate, licensed insurance representative and that the insurance policy you are getting is genuine and covered by the insurer.
1. Make sure your insurance representative is licensed
You should only purchase policies from a licensed agent who is authorised by the Monetary Authority of Singapore (MAS). To check that the person is a licensed representative, request for the person's name card, which should have the MAS representative number printed on it. With the number, you do a search on MAS's Register of Representatives web page, which has a public record of individuals who conduct regulated activities under the Securities and Future Acts and provide financial advisory services under the Financial Advisors Act. Alternatively, you can call the insurance company to confirm the person is a licensed agent.
2. Ensure that a proper sales advisory process is conducted and documented
Be aware if none of the above is properly conducted. You should also be cautious if the representative makes bold claims that are not indicated in any of the documents provided, for in his eagerness to sell, he might have misrepresented the product. Ask questions, or if necessary, ask him to point out exactly where his claims are indicated in the documents. If the agent is evasive when answering your questions, that's another red flag.
3. Request for a receipt
4. The policy document
When you receive the policy document, check that the key information such as the product name, sum insured, premium, coverage, the name of the policyholder and other personal details are correct. Be sure to notify the insurance company at once if something is amiss. Wrong information could be due to genuine human error or the representative submitting false information, such as incorrect date of birth to obtain a cheaper premium or additional coverage without you knowing or agreeing to it. This is important because incorrect information could mean that any claim you make in the future may be denied.
Importantly, do not throw away the policy document. It should be kept with your other important personal and legal documents.
5. Follow up by your insurance representative
Buying insurance is an important decision, so do take as much time as you need to choose the right policy for you or your family. Most importantly, don't let your representative pressure you into buying anything you don't need.
This article is meant purely for informational purposes and should not be relied upon as financial advice. The precise terms, conditions and exclusions of any Income products mentioned are specified in their respective policy contracts. For customised advice to suit your specific needs, consult an Income insurance advisor.