In order to meet their sales target or make a commission, employees and agents of financial services company often push products to unsuspecting customers. You may have observed that these are pushed by bank employees who insist on you buying a certain kind of insurance policy or savings scheme that may be a great one but not ideal for you. They could totally not match your investment portfolio or savings capacity and you could end up defaulting on an scheme you never wanted to begin with.
If you have been mis-sold on some of the following financial products, here are some things you can do:
With a large number of insurance agents who insist on selling policies and have little to no knowledge on how it will help you, chances are that you may have fallen prey to one of these.
If you have wrongly purchased a ULIP or an endowment policy, you should know that the Insurance regulator has a 15 days free "look" period.
Infact, some private insurers have a "look period" as long as 30 days.
The key is to recognize that the product is unfit for you as soon as possible and return it within the prescribed look period. The look period starts from the day you receive your policy document.
If you are much past the look period and opted for a traditional insurance policy (endowment or money back policy) of 10 years or more, you have two options to get some money out of the premium already paid.
1. make it a paid-up policy- the policy will be converted into paid-up policy where you do not have to pay premiums anymore. The sum assured will be reduced and you will get this on completion of the original policy duration.
2. surrender the policy- you can inform the insurer that you wish to surrender your insurance policy. You will be paid an amount sooner but less than the premiums + interest that you were expecting. However, all money will not be lost.
Note that for both the options, the policy should have acquired at least a surrender value which ideally happens when the premium is paid for minimum 3 years. If you decide to discontinue it before 3 years time, you will lose all the amount paid as premium.
If you were wrongly sold an FD, you need to apply for a premature withdrawal immediately. At a bank, you can opt out of it by paying a small penalty but the capital loss will be less than what could have been with a riskier asset like equity.
Also, you can go ahead and put the money in a higher yielding asset and recover with the losses when acted upon immediately.
If the FD was opened with an NBFC (non-banking finance company), it will be harder to opt out as most of them do not allow premature withdrawals.
Some may allow it at a quarterly interval on paying a penalty of 1 to 3 percent.
If you have bought gold bars or coins, it is best not to react immediately but hold on to it wisely. This is because if you insist on selling into a jeweller for cash rather than in exchange for jewellery, they are most likely to offer 5 to 10 percent less than the market rate.
If you are in need to purchase jewellery, you can go for it or it is best to hold on till gold prices rise.