ULIP Mis-selling?

For the past 3 to 4 years, every insurance company is marketing ULIP policies on war footing. Tall claims were made by insurers wherein returns as high as 80% were quoted. Many agents used to tell prospective buyers “Pay 10,000 for 3 years and take back 1 Crore after 25 years” Can you believe this ? Today when the stock market has crashed and the NAV’s of most schemes hit rock bottom, the big question arises as to what will happen to the dreams of the middle class policholders who dreamt of getting a maturity of 1 Crore. In the first place it was foolish of them to have even believed these figures when the agent canvassed them. But what about the agent who cheated the customer with such mind blowing figures ? The agent earned his hefty commission but the policyholder suffered. Is this a justified manner of selling policies ? Even after 60 years of independence, cant any action be taken against such Agents.


6 Replies to “ULIP Mis-selling?”

  1. That’s not a mis selling.As per economic experts Indian share market will be a bullish market at least for next thirty years. so a buyer investing 10000 for 3 years may get 1 crore or more after 25 years,considering the annual appreciation rates of major ULIP funds.What happened in the stock market is not a crash,but only a correction.

  2. As per IRDA regulations No insurance company should project the returns more than 10% pa. But it is true that some agents and DOs missold the product with high and attractive figures. But it is the duty and right of the customer to find the facts before buying. Now you can find anything with the help of internent. I had given free suggestion to so many people who approached me to guide them in these policies.

    good luck
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  3. Dear,

    Problem with insurance is that agent is given very high premium in first year & to get that commision, he can mis-guide to any extent. Once policy is sold, he is a happy man & you are into the trap for at least some year.

    It is very true that agent show you a dream that your money will multiply this much time in some year. But they do not tell you about the charges company will charge from this. They just tell you on basis of NAV growth.

    Once one agent told me that NAV of this fund is increasing at 25% & if you invest 50K every year, you will get 240K after 3 year. He was thinking that I am unaware about charge story. when he completed his speech, I show him that if I consider charges of the policy, even my investment of 150K in 3 year will not recover after 3 year. An agent can tell you 100 of lies in selling one policy. I am collecting those lies & going to write an artical about various methods of ULIP misselling.

    Also I want to tell you that the agency that control the insurance industry,IRDA, is totally failed to control this manace. Even you will find banks like ICICI, HDFC selling these policies & they will also hide charges from you.

    Due to these issues with ULIPs, I like Mutual Fund+term insurance.

    As far as market fall is concerned, have patience. This will improve with time & all should be fine.

  4. Invest in ULIP Can give you 50 lac. for your investment of 12000 for 3 years but not 1 crore. It it is possible than 30000 is not a big amount to get 1 crore at retirment age.

  5. these insurance mis-sellers have cheated the people too much yet. I just met an insurance advisor, who was just saying that his policy has 100% allocation (BIRLA SARAL JEEVAN PLAN) but he was hiding that this saral plan has a charge that is too much on monthly basis. One of my friend read the brouture & calculated the charge.On 50000/- investment, it was 17,000/- each year for 3 years & then 3000/- each year.

    These agents are really cunning guys , who just thinks about themselves & their commission. These people show big dreams to investors & do not tell the basics. Also This saral jeevan plan is designed in a way that a common man can not understand the charges easily.

    Bharat, you are very right that charges eats your investments.

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