A recent report shows that nearly 49% of life insurance policies with India's top 10 insurers are discontinued within five years, leading to substantial financial losses for policyholders, reported The Financial Express.
A survey by personal finance advisory firm 1 Finance uncovered troubling insights into the widespread mis-selling of insurance, mutual funds, and other financial products in India—often with little regard for the consumer’s best interests.
The report sheds light on widespread mis-selling, where customers are sold insurance policies without being given complete or accurate information.
As a result, many end up with costly or inappropriate plans that they eventually discontinue- leading to financial losses and missed benefits. The findings underscore an urgent need for improved transparency and consumer awareness in the insurance industry to better safeguard policyholders.
“Around 49% of life insurance policies are discontinued within five years, with the average 61st-month persistency ratio for the top 10 life insurers standing at just 51%. This means nearly half of policyholders stop paying premiums within five years — often walking away with significant financial losses,” the report said.