The most important person in the life insurance business TODAY is the ‘policy retention manager’. In every industry the MOST IMPORTANT PERSON keeps changing from time to time. Now is the time of the person who does the cleaning up after the ELEPHANT has done the big job!

Over the past 10 years life insurance has been sold as:

a) a tax saving device

b) a brilliant investment device which will double your investments in 3 years

c) an investment product which SHOULD be kept ONLY for 3 years

etc. etc.

Now some very senior people in the industry (with appropriate gravity in the voice) ask me ‘Subra why do you think there are so many surrenders these days’. I feel like laughing because it is exactly THIS set of people who were celebrating their ‘mis-selling’ in the year 2008 and 2009. Did they NOT realise in 2008 that in the year 2011 these policies will come home to roost?

What about the ‘investor’ who signed the ‘policy illustration’ which showed CLEARLY that it would take at least 5 years for the sum accumulated to be equal to the premium paid.

Now the client calls up and the conversation goes as follows:

Client: I wish to surrender the policy no. 00012545668 ULIP taken in 2007. I have paid for 4 years and now wish to surrender it.

Insurance company: Sir you have invested Rs. 36,000 in 4 years, now the NAV is Rs. 24,000. Wait for another 3 years, then the NAV will at least be equal to the amount invested…

Client: but my financial planner has asked me to withdraw

Ins Co.: Sir, the market is so low NOW, hence the value is low. If you wait, the market will improve and you will recover your money.

Client: is it so?

Ins Co.: Yes sir…just wait till you pay 7 premiums – and the fund value will be more than the premium paid…

Client: OK madam I will just wait.

Ins Co.: Ok sir, bye.

Puts the phone down and tells his colleague

“these muppets are so tough to handle”…..OMG they argue too much.



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  1. All most all insurance agents were sold the policy by telling lie in the year 2006 – 2007 when the markets were in peak value. Now customer support persons are struggling to answer the investor.

  2. Customer support do not have the answers to most of the questions.
    Kotak with whom I have dealt with – over e-mails and their web portal – almost invariably have answers like – please read the offer document – even when the question is specific to my policy and the amount involved (i.e. not a generic).

    They hate it when you go into specifics.
    And then end the call with – is there anything ‘ELSE’ i can assist you with? Have a good day.

  3. Sorry – in the comment above it’s not Kotak – who mostly have answers to most of the questions and have given me a satisfactory experience so far – but a different bank (in the league largest, biggest etc). Their customer support had not been of much help and once lead me to approach Ombudsman.

  4. HDFC Life taught me that service and complaints are same. First I received a premium payment notification. In that they did not mention auto debit even though I opted for it. I asked for the clarification. First and second mail ignored. I am prepared to pay through net banking and almost went to the bank page but withdrew in the last minute.

    Last time I thought, let’s raise a complaint. I got a reply that my auto debit is active. Had I paid through netbanking, it would have gone as double payment and we know the hassles of getting back the amount.

    After the auto debit, no receipt was generated for a week. My 2 mails to service desk go blank. Had to raise again complaint and the receipt was generated. I completely lost my faith that they would settle any claims. Survival benefits if we chase them but doubt non survival.

  5. Subra,

    I have been chasing a Big Insurance company for a 5 cr Term insurance and you should see how tough it is to buy one – first they told me I shouldnt go for it since I will not get any money back, then they said opt for premium return atleast, then the guy sends me a wrong premium quote ( thank god I had checked online), then they said mortality charge will keep increasing ( I said it will be the other way round and I could prove it!!) and now finally they have given up and are ready to meet me to give me this policy – I am in the financial services industry, read a bit and hopefully could go through these hoops – god save the aam aadmi 🙂

  6. Policy surrenders are more these days because people have become wise.
    They have begun to realize that investment and insurance are separate.
    I try to educate people whenever possible about the disadvantages of
    buying anything other than a term insurance from an insurance company.

  7. I must confess, that I was taken for a ride by one acquaintance (cant call him a friend anymore) and today I’m saddled with a unit linked insurance policy that will perfectly fall in the category that Subra describes in the dialogue here in the post.

    Not just fiction, it is reality and I for one am an victim, only grace that the amount it not large but nonetheless it hurts when you feel cheated.

  8. Ravinder,

    it is not always the agent who is to be blamed. YOU HAVE TO BE BLAMED for choosing a half baked agent who:

    a) was either a cheat who knew what was happening or
    b) was an idiot who did not know what was happening

    either ways it was a wrong choice of an agent. And if you choose the agent because somebody asked you to, again bad luck 🙂

  9. True – not bad luck but one needs to own up responsibility and blame oneself for having taken a foolish decision no matter who touted you into it.

    But there is an old english song that goes by the wording,

    “Blame it on the rain”

    No other way to console oneself

  10. The Englishman also says ‘I ran the thorn’ he does not say ‘kaanta lag gaya’…:-)

    accepting responsibility is rarely taught in Indian conditions. Easy to blame others. See the govt saying ‘Investor education’ should it not be ‘Investor learning’…who needs it more? Investor or Government? LOL

  11. haha.. i remember the conversation with tata sky cust care and he was not allowing me to drop cricket package.

    “Why sir? Cricket is such a good game. Please enjoy”.
    Me: “The series is over.”
    “Another series will come, Sir”
    Me: “Just do what I say. Don’t argue”

    Only when I shouted, he went ahead and closed the pack.

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