New ULIP : Private Insurers vs. LIC

Sometimes you get rich by not getting ESOPs! If the private life insurance companies did not give you ESOP, rejoice.

It must be really difficult if you have such a tough competitor like LIC! Look at what all they do:

1. They give in writing to corporates – we will give you 9.35% p.a. return in your pension products.

2. They are planning to pay commission at the same rates as they are paying currently – the private sector guys will be stretched for cash if they decide to play ball.

3. There is no clue to the outside world about what LIC is really earning – it is as much a black box as UTI was pre-Sebi. From this black box they are paying some amount – we do not know whether they are earning 100 and paying 70 or even worse earning 70 and paying 100. Remember the last days of UTI? In desperation they hiked the equity content in their portfolio from 45% to 70% – which took the toll of the jobs of MM Kapoor and Mr. P S Subramanyam (ED and MD of UTI respectively).

4. No clue about the corruption / accounting mess if any at LIC.

5. LIC will make tons of money by encouraging more agents to join – saying how they will be able to hit the competition. Not a bad sales pitch.

read on…

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