Mis Selling–A Bane on Growth of Life Insurance

Indian insurance industry is growing to the large extent.There are 52 insurance companies operating in the country, including 24 in life and 28 in non-life segments. India as a country still remains 'under-insured'in terms of insurance penetration and density.Mis-selling of life insurance is ubiquitous and it is very common in insurance sector. It is providing wrong information about product features or exaggerated returns. Mis-selling complaints are the dominate kind of grievances in the life insurance industry (Source: IRDAI Annual Report 2014-15). The objective of the study is to understand the reasons for misselling of policies in public and private sector insurance companies. The primary data was collected by using the structured questionnaire and secondary data was collected from journals, newspapers and the internet. The study area is limited to Coimbatore District.The reason to conduct the study in Coimbatore district is that details pertaining to the misspelling in insurance is not available clearly and the previous research is not done in Coimbatore district.The result of the study discloses that agents make quick buck in form of insurance commission, heavy sales pressure, providing fake NAV units for the past data, Managing fake medical tests and proposal form filled by agents and other salesmen are the reasons for the misselling at LIC whereas heavy sales pressure, providing fake NAV units for the past data, managing fake medical tests, agents make quick buck in the form of insurance commissions and role Ambiguity are the main reasons for misselling at private insurance companies.