Update on My LIC Jeevan Saral Policy

If you have read my previous post on LIC's Jeevan Saral Policy Review, you must have noticed that I made a mistake in getting the policy during my recent trip to India. At that time, I didn't have an Internet accessible to do the research on this policy nor was I prepared to ask the right questions to the insurance agent. Therefore, my decision to jump the gun was solely based on the sales pitch made by the agent. Once I returned to the US, I researched on this policy and quickly noticed that things weren't really adding up to the hype generated by this policy. Therefore, my immediate reaction was to get out of the policy.

During this research, I came across two blogs, Jago Investor and My Journey to Billionaire Club. Both these blogs have helped me improve my understanding of how LIC policies work and investment avenues in India. From one of these blogs, I came to know of an insurance regulation called Free Look Cancellation Period. All insurance companies are mandated to provide a period of two weeks from the receipt of the policy bond in which the customer can choose freely, at his own will, to cancel the policy. This period is also known informally as a "cooling off" period.

Then, I researched further on how to cancel your policy during the Insurance Free Look Cancellation Period. My first step was to contact the sales agent, who tried to convince me to stay on the policy, for obvious reasons. Then, I contacted LIC's customer service via email. They informed that I can cancel the policy by providing a written notice of cancellation if the policy is not issued or by following the procedure mentioned in the bond if the policy has been issued. The slow pace of LIC's approval process worked best to my advantage. My policies had not been issued. So, I sent a written letter to the local LIC's office. I have written a blog post explaining how to cancel insurance policy during the free look cancellation period.

The cancellation notice as well as the email communication with LIC's customer service was not received well by the local branch. They approached my family and tried to explain how bad of a mistake I was making. They also did not like that I approached directly to their customer service of headquarters, then regional office, as well as the branch manager. My family was told that I should not have to go through these steps if I simply had asked the sales agent to cancel the policy. I felt a bit put off by the customer service provided by the sales agent. As a final resort, the sales agent also tried to convince my family that I should put the refund into their LIC Bima Bachat (Money-back) Policy on the grounds that since I'm a NRI, it would be hard for me to deposit this check overseas and collect money. So, better to put this money to work rather than not being able to cash your check. By now, I was very familiar with how LIC policies work and persisted on getting a check rather than another policy.

After cancellation notices, I did not receive any replies back from the local branch. I followed up 4-5 times. Finally, I received an email stating that they have issued a refund on my policy. I was relieved to have finally received the refund in a check. My next steps are to open a NRO account and deposit this check.

Conclusion

I want to stress here is that, overall looking at the outcome, LIC's offices did provide me with a good (or a at least reasonable) level of customer service. I also spoke to one of the officers who was polite and courteous. But, the service provided by the sales agent was sub-par. Persistence is key. If you don't know how to provide counter-arguments to the sales agent, it is hard to win the battle on verbal arguments. Know your rights and know how to exercise your rights. Finally, keep cool and be patient.