Letters: December 17, 2009

Dispute over terms of insurance policy

In December 2006, two agents from American Life Insurance Company (Alico) Gulf approached me and explained an insurance policy, which was basically a pension scheme. I asked them to discuss it with my family and requested them to visit my residence in Sharjah.

The next day, the agents arrived and explained the different terminology of the policy, which my wife and I barely understood, as they were very technical.

We asked a very simple question — if we cancel the policy halfway, would we get our money back? The agents confirmed that we would.

I explained that in India if I cancelled my insurance, I did not get a refund. But the agents reiterated that the policy here was different and we would get our money back.

For me, this was the governing factor. They gave me some papers — after enquiring again about the refund, I finally signed the papers and paid the premium.

In January 2009, I contacted the Alico office to cancel the policy and their response was shocking — upon cancellation, I would lose all the money that I paid. The surrender value was only $700 (Dh2,569). So far, I have paid a total amount of nearly Dh30,000. I told them that their agents had misguided me and requested the management to return the amount after deducting some charges.

The issue is still unresolved.

 From Mr K. Singh, Dubai

Mr Hagop Motafian, assistant manager of the conservation department — Alico Gulf, responds:

On the basis of our investigation and meetings with Mr Singh, we would like to conclude that due to personal issues, Mr Singh is worried about his financial situation and requesting a full refund of premium payments. Several meetings were arranged with Mr Singh and policy terms and conditions were confirmed to him, but he kept requesting a refund of the premium. Since Mr Singh enjoyed the insurance coverage for the period that he paid the premiums, we cannot refund the full amount that he paid. Therefore, in the event of receiving an official written request from the policy owner, we would proceed to pay him the surrender value of the policy, as per policy terms and conditions.

Mr Singh responds:

I disagree with Alico Gulf's reply. I signed the policy based on the information that whenever I cancelled the policy I could get the full amount — this information was provided by their agents. I never told them that I wanted to cancel the policy because my job was at risk and I needed the money. I wanted to cancel it because this policy is based on wrong information. Once I knew I had been cheated, I could not go further. I even asked them for an alternative but, so far, they have not provided anything.

Mr David Jacknouz, customer service and conservation officer — Alico Gulf, responds:

As per our correspondence, we can apply the policy terms and conditions and the contract provisions only, which was explained to the customer on several occasions via e-mail, phone calls and meetings held at our offices.