Do these Things if you are forced to buy a Policy with Your Home Loan?
Apr 14, 2017 Home Loan
Many times in the final stages of loan approval process banks impose a restriction that some kind of ULIP policy or some other kind of insurance product is mandatory if you want the loan to be approved. They do it at this juncture because that’s the time when most of the customer will not reject the option and will forcefully go for it.
IRDA has clearly stated in a circular that this kind of bundling or forced selling is not fair and should be stopped. It is just a marketing gimmick and a way to exploit people. Some customers fall for such traps, but in reality, there is no compulsion to buy any kind of product, for example, insurance, with the home loan. Although cross-selling facilitates lending banks to use existing channels to reach out to those who are looking to buy insurance products. But at the same time, they must not put the customer to any kind of disadvantage because of the packaging. Therefore, you must be very cautious. Otherwise, the bank might sell you the policy and you come to know about it very late.
But, what to do when forced to buy insurance along with home loan? Try the following tips.
1)One of the most straightforward ways of setting things right is by telling them you are aware of the RBI circular that these practices are not fair and ask the bank for an explanation on how they are still doing it. You can also add that you have helped another friend of yours to get a home loan without the bundled insurance. If this is not enough, you can mention that you have filed for RTI to IRDA and asked for this, if they want you can bring the RTI reply from IRDA.
2)Reject the offer and wait for them to come back: If you show desperation in getting home loans, they will surely put forward such restrictions of taking policies. In such situations, you can just reject the offer totally and tell them that you really are not so desperate to get the home loan. In all probabilities, they will just come on track when they realise that you will not take their bait.
3) Ask them to give it in writing about their restriction: You can also tell the bank official that you are thinking of inquiring about this with banking ombudsman because you have already filed a case for your friend and got compensation for this. Tell them that you don’t need a home loan from them, if they are not ready to give it in writing.
4)Take the Policy but return back in Free Lookup period: If you have no option other than going ahead even though you are disgusted by this force game, just go ahead with policy and pay the premium for the first year. Then the moment you get policy documents, initiate the process of returning back the policy within the 15 days free look-up period.
IRDA has clearly stated in a circular that this kind of bundling or forced selling is not fair and should be stopped. It is just a marketing gimmick and a way to exploit people. Some customers fall for such traps, but in reality, there is no compulsion to buy any kind of product, for example, insurance, with the home loan. Although cross-selling facilitates lending banks to use existing channels to reach out to those who are looking to buy insurance products. But at the same time, they must not put the customer to any kind of disadvantage because of the packaging. Therefore, you must be very cautious. Otherwise, the bank might sell you the policy and you come to know about it very late.
But, what to do when forced to buy insurance along with home loan? Try the following tips.
1)One of the most straightforward ways of setting things right is by telling them you are aware of the RBI circular that these practices are not fair and ask the bank for an explanation on how they are still doing it. You can also add that you have helped another friend of yours to get a home loan without the bundled insurance. If this is not enough, you can mention that you have filed for RTI to IRDA and asked for this, if they want you can bring the RTI reply from IRDA.
2)Reject the offer and wait for them to come back: If you show desperation in getting home loans, they will surely put forward such restrictions of taking policies. In such situations, you can just reject the offer totally and tell them that you really are not so desperate to get the home loan. In all probabilities, they will just come on track when they realise that you will not take their bait.
3) Ask them to give it in writing about their restriction: You can also tell the bank official that you are thinking of inquiring about this with banking ombudsman because you have already filed a case for your friend and got compensation for this. Tell them that you don’t need a home loan from them, if they are not ready to give it in writing.
4)Take the Policy but return back in Free Lookup period: If you have no option other than going ahead even though you are disgusted by this force game, just go ahead with policy and pay the premium for the first year. Then the moment you get policy documents, initiate the process of returning back the policy within the 15 days free look-up period.
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