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Urgent help-misselling insurance to 80+ yr old

Querist : Anonymous (Querist) 23 November 2021 This query is : Open 
Little lengthy - but its urgent- kindly guide me.

>>>

BACKGROUND
My father is 80+ and suffering from Alzheimer's/dementia. He receives a pension of 25K per month. Prior to the diagnosis of his disease, he fell victim to mis-selling of 13 insurance policies by 2 agents in just 2 yrs time - total premium around 25Lac p.a for 5 - 6 years. From what the doctor told and from learning more about Alzheimer's, it is clear that he had serious memory decline already at that time and was not in a position to handle financial decisions. The agents have misguided him heavily as he was not in a position to oppose when they were dumping policies to him. My parents were staying in different location at that time and I was not aware of any of his finance etc.

They are all life insurance policies given in the names of me, my sister, my mother and my daughter. In some cases agents have filled wrong salary and rental income details in the proposal form for myself and my sister whereas both are home-makers and have no personal income. I was not aware that so many policies were given and secondly my father had told they were like FD to avoid tax from some maturity amount he received so I thought it was only one time investment. After 2 years,( in 2019-2020) the policies started lapsing and by this time my father had total memory loss and is not in a position to even remember anything. I got to know all this when I started receiving several calls on my fathers mobile for premium payment. After a lot of research I understood that the agents had sold policies knowing somehow about his maturity money and must have definitely known that he cannot pay more that 2 yrs premium.

First I raised complaint with the companies. Some 5 polices have been cancelled and refunded by the company itself, these are lower value polices < 1 lac per annum.

For the others where the company refused to cancel and refund, I had raised complaint earlier this year with the local Insurance Ombudsman and the Policies have now started to come up for hearing with ombudsman, on different dates.
1) In the first case, policy is in the name of my daughter with my father as proposer. Ombudsman asked to refund the amount due to some technical mistake in selling- grandfather to grand daughter
2) Second policy, in my mother's name (she is the proposer and life assured, currently 69yr old) In this 3 premiums totally 2.4 lacs have been paid. The judge said since my fathers name is not involved in this, he cannot treat this policy like the first one. He has ordered the company to make it a single premium policy.
3) In the third policy, my sister is the proposer and life assured. Premium around 2.5Lacs Half yearly and 3 premiums have been paid. My sister is uneducated and no personal income. The judge questioned the company how they could give policy to someone with no capacity to pay premium - sum assured is 50Lacs. They have given them 2 days time to contact the broker company and come up with the explanation. I am waiting for the ombudsman decision.

My queries:
1. In the case where policy is converted to single premium, will the insurance company deduct some amount as administration charges etc or is the full amount taken for premium.
(The ombudsman did not mention about any deduction but the A.S.O who called me again after hearing said there will be deduction.)
2. Given the heavy mis-selling, should the judge not order for refund all amount even if it is in the name of my sister or myself. He said he would not treat all cases same as they are in different names.
3. The policy in my name is nearly 7 Lac per annum premium. And 2 yrs premium paid. The A.S.O has warned me again for this that if I go for hearing, the ombudsman will reject my case as I am educated. So he said he will talk to company and settle something and I should withdraw with compromise. Is he guiding me correctly?
Querist : Anonymous (Querist) 23 November 2021
Query Re-posted with more details. Please read the updated query.
Unable to delete this, hence marked as Resolved.
Sudhir Kumar (Expert) 23 November 2021
1. In the case where policy is converted to single premium, will the insurance company deduct some amount as administration charges etc or is the full amount taken for premium. (The ombudsman did not mention about any deduction but the A.S.O who called me again after hearing said there will be deduction.) THEY WILL NOT MISS OPPORTUNITY 2. Given the heavy mis-selling, should the judge not order for refund all amount even if it is in the name of my sister or myself. He said he would not treat all cases same as they are in different names. HAS THE SAID AGENT ALSO BEEN IMPLETDED. ANYHOW THE CONTRACT IS VOID DUE TO MISREPRESENTATION. 3. The policy in my name is nearly 7 Lac per annum premium. And 2 yrs premium paid. The A.S.O has warned me again for this that if I go for hearing, the ombudsman will reject my case as I am educated. So he said he will talk to company and settle something and I should withdraw with compromise. Is he guiding me correctly? ARE YOU THE INSURED PERSON IN THIS POLICY OR YOU ARE NOMINEE.

Querist : Anonymous (Querist) 23 November 2021

Sir, thanks for your reply.My responses below.
One point to add : someone from the Ombudsman office (Assistance Secretary to Ombudsman (A.S.O), who was with the judge in the hearings) has been calling me several times asking me (literally threatening) to withdraw the cases and settle with a compromise with the Insurance company (the terms of which it seems he will speak to company and arrange) or else I will not receive any refund and cases will be reversed. Inspite of that I went ahead with the hearings based on someone's suggestion. Why is he putting so much pressure on me? Is he misguiding me? Should I report this person?

1. In the case where policy is converted to single premium, will the insurance company deduct some amount as administration charges etc or is the full amount taken for premium. (The ombudsman did not mention about any deduction but the A.S.O who called me again after hearing said there will be deduction.) THEY WILL NOT MISS OPPORTUNITY

2. Given the heavy mis-selling, should the judge not order for refund all amount even if it is in the name of my sister or myself. He said he would not treat all cases same as they are in different names.

HAS THE SAID AGENT ALSO BEEN IMPLETDED. ANYHOW THE CONTRACT IS VOID DUE TO MISREPRESENTATION.

Sir, I did not understand your question. Ombudsman said they tried to get in touch with the broker. He has asked the company to give a complete report after talking to broker.
"Contract is void" - what does it mean Sir. What should be the judgement here. I don't know how to further argue with the ombudsman (judge) because though he clearly understood that it is mis-selling he said he cant treat all cases same. He is asking me why we all signed without checking. I told him that it is because we did not identify my father's memory problem at that time and just blindly went by whatever he told. But for sure he was only prepared for single premium at the most.

3. The policy in my name is nearly 7 Lac per annum premium. And 2 yrs premium paid. The A.S.O has warned me again for this that if I go for hearing, the ombudsman will reject my case as I am educated. So he said he will talk to company and settle something and I should withdraw with compromise. Is he guiding me correctly?

ARE YOU THE INSURED PERSON IN THIS POLICY OR YOU ARE NOMINEE.

Sir, I am the Policy holder + Insured person. My father is the nominee in this policy.
For all policies the cheques/bank transactions for all premiums are from my father's account - I have the bank statements.



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