Life insurance gimmicks: How insurance companies trick policyholders with exit barriers?

livemint.com:

Life insurance, particularly ULIP has been the most accused product for about a decade now, due to the cursed legacy, mostly of policies which were issued pre 2010 when ULIPs used to operate at disproportionately high charges which dipped into the benefit of customers. Though these bad memories were caused purely by ULIPs, the name "Life Insurance" is taken here consciously as the moment the name "Life Insurance" is spelt today a large section of customers tend to get a feeling of fear and aversion though ULIP was not an insurance focused but Investment centric product.

As any bad experience that has caused many victims remains as a scar in the minds of people, the old ULIPs which had many victims right from youngsters to the retired, have resulted in life insurance itself being seen as a bad omen. While this is a wound in the long process of healing, there are other new sins which some life insurance companies are piling up, most of which are the leading players.

This article attempts to highlight those for the awareness of investors, course correction of insurers and to reach the optics of the regulator. The practice we point out here is followed by one of the top 3 players which may or may not be followed by the others.

In this net-linked world, the company still hasn’t figured out a way to allow customers to exit from a policy online. The practices appear as though they intentionally have kept the online option closed for policy closures whereas they provide an online login to view status, make fund switches etc.

This statement is more than supported by the practice of forcing customers to come to their office for closing the policies. Once the customer lands there, he is welcomed by an employee who is trained to try