A couple of days back I had reproduced a letter from a grateful life insurance nominee.

Let me tell you what led to that story….

Here was a young person (aged about 40) who had died. He had 3 life policies from Cos. A, B and C. For obvious reasons, the names cannot be given out – but I am dying to give out the names :).

Company A in its bureaucratic style accepted the application, but did not do anything…at least for a while.

Company B said please send the application to our HO – claims are handled there.

Company C said ‘This is a pre-existing illness, so we cannot pay.

The nominee – a housewife panicked and called her cousin. He happens to be my computer supplier. He knew about my love for big finance companies and asked whether I could help.

I called company B head of claims and said I could read the riot act to his Board, but before that could he help? He apologised and to cut a long story short, paid the money in a weeks time.

I called a friend who used to do audits for the collaborator of company C. He said we have a ‘stonewall policy’ so please ensure that she does not go anywhere near our office without LEGAL help. However he was helpful – or I may have made a mess by being overconfident.

Having secured the money from B and C (both those companies worked without any ‘bossgiri’ – and stunned this lady) I drafted a simple letter. It said…I had this insurance…cos. B and C have paid…A is refusing to pay’ and sent her to the Ombudsman.

She got called in 3-4 days time. She went alone – like a scared wet cat. Company A came with 2 lawyers, suited and booted.

The Ombudsman told the company – you have a lot of choice. You can pay her tomorrow morning or evening. You can pay by cheque of pay order. The whole process lasted a few minutes. She was in tears.

Hopefully my computer supplier will give me good service for my laptop. L O L.

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  1. Great to hear this .

    However hearing the story gives an indication that having contacts means a lot in this area , where will a comman find a Subra ?


  2. Unfortunately, Not everyone happens to be your computer vendor … can you imagine the sorrow and grief of the lady if you were not able help … For Claim, insurance is bought for
    Why cant we have a well maintain system in india ? Wish you cld reveal name of bastards companie/boss

  3. Sirjee, This one is just too good. Not just because you helped this lady but I’m sure quite a lot of people have learnt from it. Especially Ombudsman, many (including me) are unaware of this Govt. body and would have just massaged agent to get money their out.



  4. Subra

    I was actually referring to your friend who used to do audits for the collaborator of company C and your ability to read the riot act to B’s board . I mean to say the process was much simpler because of contacts you had (and you are also a contact for that lady) and your knowledge in the area .

    Else a common man gets daunted by all the tricks companies can play and then people keep mouth shut .


  5. “Company C said β€˜This is a pre-existing illness, so we cannot pay.” – I thought this weasel route was for health insurance. How can this be used for life-insurance? As long as company cannot prove that I lied on the proposal form, can this route be allowed???
    Nevertheless, you have shown that knowledge is key – whether it is knowing the right people, knowing the right websites, knowing the right acts, etc…

  6. Param banish the thought of company not being able to prove that you lied. Shows you are not seeing the American websites. Companies appoint agents, doctors, lawyers to unearth the truth. LIC was never bothered about the policy holders or shareholder.

    Remember a FALSE CLAIM is a FRAUD on other policyholders and shareholders.

    Do not try to find the right way of doing a wrong thing – it does not exist.

    knowledge is the key – but it should be available for free – Mera Bharat Mahan. See Manish’s article being stolen by a newspaper. If i want Manish’s article, I have to give a link, HOw can I translate? L O L

  7. Your articles are cool. Happened to accidentally read one of them and have become a regular reader (well, almost!)

    I also host a financial blog, and aspire to make it as good as yours AND as regular with new posts as yours.

    Coming to this particular article, I certainly agree with Manish. In India, unfortunately, contacts do seem to make a mighty difference. How many of the common man’s servant maids opened a no-frills bank account? How many have got a simple term policy for a cover of a lakh of rupees? How many have got a PAN card enabling them to invest their small little sums of money in mutual funds?

    I wish that things will change. I’m sure that people like you, Manish and I are all sailing in the same boat – trying to be part of that “Change movement”. I certainly hope that we live to see the day!


    (If you are interested in taking a look at my blog, please search for “Financial Views of Mr. N”)

  8. Subra,

    I have been a good follower of your website, i invested 2 lakhs in top indian MF companie’s diversified fund. But i was not sure, what is the return if i keep it for next 20 years or so.

    My queries.
    1. I invested when the NIFTY at 5200, so in order to expect returns of 400% in 20 years, will the nifty be at 20,000 or so.
    2. Will the Indian GDP be at 4.5 trillion in 2030 or so? currently it is 1.2 trillion.
    3. Is that possible to get my return 400%, even if the NIFTY stays at 8000-10000.
    4. Do you really think, india is in long term secualar bull story? if so why?

    I apprecaite if you could answer from you thoughts. every where i read, sensex returned 15% returns, from 1980-2010, but will this repeat in next 20 years. ofcourse i am ok even for 10% return after deducting fund charges

  9. Subra,

    will be be good to publish te names and better still get it print media if one can ( they will loose thier jobs if the lose the advt !)

  10. you should visit a site called badinsurers.org – not sure if it still exists. It is hugely tempting to do something like this in India – but the end client has to fund it. In India any business model where the user has to pay does not work. Imagine Mahesh and I paid Rs. 100 per annum as school fees – now we have been forced to pay Rs. 30k per annum. THE QUALITY IS NOT VERY DIFFERENT. Sorry to say I judge a school/ any biz by the quality of the loo that they maintain. Quality of teachers, quality of loo,…my school was not very different. However we neither demand quality NOR GET even when we pay. See the banks, insurance companies, amc, …so to create a ‘bad insurer’ makes no business sense. Just for satisfaction kind of ‘business’ fails. There has to be a business model..to support it.

  11. Hearing this story I’m realy scared now.

    I’m thinking of taking 3 life insurance policies instead of one policy.

  12. Sanjeev Bhatia CFP


    One comment that I read about insurance in one of your posts a long time ago is still nagging in my mind. You had said in one of your articles “What can go wrong with a term insurance? Think and post comments.”. I cannot think of anything else except that if one is not disciplined enough to take care of his investments, he will face problems in achieving his financial goals. In Ulip/endowment policies atelast it is cumpolsary saving for him.

    Please elaborate on your comment and enlighten us lesser mortals.

    Posting this in two posts in the hope it catches your attention.


  13. yes sanjeev it has caught my attention…Term insurance risk means the company not making the death payment claim. If your mf does not take u to ur goal that is not a term insurance risk

    term insurance risks are too many….which is why a good adviser is so important πŸ™‚

    as a planner if u are not happy with the term insurance commission, you should charge the client – i know of a guy who charges fees for selling term insurance – way to go!

  14. Suresh Vishwanathan

    Well this story says two things claims are not paid as a matter of course.

    Much to everyones dislike of intermediation in financial services and all this brouhaha on commission to the agent I feel the agent and the intermediate have a role to play and I (at least at the persona lever) have experienced very good service from the companies once people like Shyam interfere. There can be bad agents but at least I have had the good fortune of having a Shyam and I dont think why others also cannot get one. Left to oneself you may not know where to go and whom to approach

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