All channels have gone to town saying that the IRDA has come down on mis-selling of ULIPs. Has it really done that? How?

Well most channels cannot handle it.

However what IRDA has done is simple – they have shifted the cost of mis-selling from the customer to the manufacturer. Till today if you went and told a manufacturer that there is mis-selling, they would react as follows:

1. Our company is not doing it – Complete denial

2. Partial Denial: Our employees do not, our agents maybe doing it.

3. It is not a mis-sell just that the client is not understanding it properly (I did not understand what it means)

4. Selling life insurance to a bachelor with an ageing mother is not a mis-sale Subra. Maybe the bachelor wanted it. When I spoke to the bachelor he thought he was buying a pension plan. L O L.

5. Selling an insurance to a child is not a mis-sale, client wanted it.

I could just go on and on…

However by reducing the yields and dramatically reducing the surrender charge (6% subject to a maximum of Rs. 6000) the cost of mis-selling has been shifted to the P&L of the life insurance company.

The share prices of the insurance promoters has not fallen enough to reflect this….

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  1. Just out of curiosity: why do you use so many “LOL”s in your posts? I always felt there were too many, in the wrong places, and ended up making you sound condescending on many occasions.

  2. Hi Subra
    Are these changes to ULIPs applicable to the new customers only.
    Say i have been having ulip for the past 4-5 years will these be effective to those as well
    Please let me know on this

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