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
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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