Yesterday i was watching an episode ‘Crime Patrol’ on Sony TV. I have no clue of the names of the characters, but that does not matter.

The story is about a young businessman based in Gujarat…and he thought he was being smart. Sad, as the case is, he was actually getting his family into much more trouble….

One young businessman whose business was failing wanted to ‘help’ his family. He was in deep financial mess and he thought he could come out of all this by just insuring himself and then killing himself. He thought this would help his family get Rs. 1.25 crores – and they would be out of trouble.

Let us see what he did.

– He took multiple policies of Rs. 20-30 lakhs each totaling Rs. 1.25 crores.

– He paid all the premia promptly and on time

One day he was found murdered on the highway in his own car…..

To cut the long story short, he had asked his friend to travel with him, and KILL HIM so that his family could claim the money and well, be rich.

What did he think:

– As it was a ‘murder’ case, his family would get the full sum assured (he knew if he committed suicide within one year, the life insurance companies would not pay).

Mistakes of knowledge:

– he had not informed the insurance companies about the existence of ‘other’ policies. So when a company was issuing a policy of Rs. 30 lakhs they did not know that he had other insurance policies. This is a major, major error that many people make.

– he thought that a suicide attempt (he tried ramming the car twice in an attempt to kill himself) – would all go unnoticed by the authorities

– he did not know that a life policy will surely get investigated for an early claim (less than 2 years of the policy issuance)

Amazingly stupid plan, I am writing about this just to tell people that there are no short cuts to help your family. This guy who was in trouble financially was still driving a car, did not tell his family that he was in financial trouble, his ‘friend’ who helped him will spend another 8-14 years in jail.

Insurance companies are here to do ‘business’ not to do charity. Honest people with honestly filled forms have a 100% chance of the claim being paid. Not that all insurance companies are honest – they will do their best to delay or not pay, but if you fill up the form honestly and know somebody who will take up the fight on behalf of the person who has died, there is a very very good chance that the nominee will get paid…

sad, but true case.

Of course one of his policies was old – say 5 years old, this WILL SURELY get paid. Suicide / suicide made to look like murder will be seen as a fraud by the new policy issuers ONLY. Older policies cannot hide under suicide / some other clause.

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  1. Hi Subramanyam sir,

    I have taken LIC Jeevan Anand policy 5 years ago (and paying yearly premiums) and took a term plan from Aviva last year. While applying for Aviva term plan, I have informed (and submitted proofs) the insurance company about the existence of ‘other’ policies.

    Should I inform LIC as well about the Aviva term plan?

    Siva Mohan

  2. Very good question Siva Mohan. Thanks for asking, I have never considered this question.

    The answer is simple – NO. You have to state all the facts as of that day. So if you took a life insurance policy in 2004 with LiC for Rs. 5 lakhs, and then applied for another policy from Hdfc in 2009 for say 5 L, and say you have also developed some condition – like say diabetes.

    YOU ARE DUTY BOUND to inform Hdfc about the lic policy and the diabetes. However you did not have diabetes nor any other policy when you took a plan from LIC. So you need not inform LIC.

  3. sir,

    A friend of mine has asked me a question regarding health insurance that if he takes 2 policies from 2 different insurers,say,for 5 lakhs each,and if he has a claim for 10 lakhs,then,can he use the 2 policies simultaneously to claim 10 lakh as each of them individually covers only 5 lakhs.Is he correct?

  4. so if i take 5 term plans from diff companies, and told truth to them about others, will nominee get sum assured from all companies in case of mishappening?
    and should the nominee be aware about my term plans?

  5. ‘lovely’

    u can get about 10 times your annual income as insurance..yes for younger people it can go up to say 30 times, if the underwriter feels his income will go up. So if u take many policies and have told all of them…YES you will get paid…provided there is no suspected foul play …:-)

  6. sudheer

    your friend is correct. However if one policy is say 7 years old and one is 4 years ago…and he developed this disease 5 years ago, the older policy will pay, the new one will say ‘pre existing illness…’

  7. Please read the fine print when buying Life policies.

    Please check all exclusions when buying health policies.

    This market is a market designed for the CUSTOMER TO LOSE without any doubt.

  8. what if i have plan to surrender all the stupid policies such as money back and endowment after taking a new term policy? Should I have to mention that i have stupid plans with me, though i have plan to surrender?
    Considering the plan if i surrender all the plans after buying term insurance and in case of eventuality, will my nominee get the funds?

  9. Dear Sir

    I have below query with respect to insurance.

    1. I bought couple of lic policies on 1999. Those are my first policies

    2. Later in year 2003 i bought icici prudential life insurance and tata aig golden year plans. i didnt informed both icici and tata aig about my lic policies

    3. later in year 2009, i bought max newyork term life. here too, i didnt mentioned about my other policies.

    Will i be in trouble now? should i inform about my policies to all the insurers

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