Recently when a friend asked me what are the risks in unit linked plans…I said Well Max New York Life has started a campaign saying “Our agents are different”..well I wish they say this to the client BEFORE the client signs up:

Sir the following risks exist in a Unit linked Plan:

1. Buying ULIP is a long term committment and you should look at a 15 year premium paying term at least.

2. Our charges favor the bigger premium payers, and there are some absolute charges, so please pay a premium of at least Rs. 20,000 per month.

3. As a long term product the surrender charges are very high for an early surrender. If you stop paying the premium within 5 years the chances are you will get NOTHING.

4. Our fund managers are, well, hmm at best average and historically all of them have underperformed the sensex and the nifty over 5 year rolling periods.

5. Irda has approved does not mean they have understood the product. It just means it meets their current norms.

6. The Insurer makes no comment nor does he recommend the underlying assets. Our sales people use words like asset allocation, switching, reallocation – this is proof that they are trained in using jargon. If you think they understand this, give me your boss’s phone number, you need to have your head examined.

7. You have to have the ability to choose the underlying assets and their combination. If you cannot, please get a PhD in finance, or hire a fund manager. If you have funds in excess of 5 Billion US $, Goldman Sachs will offer you fund management expertise. If you have less than that..hey muppet what are you doing here?

8. If the value of the fund falls below the point at which we lose interest (i.e. below Rs. 500,000) we reserve the right to close the policy and give back the money to you after deducting our closing charges of Rs. 489,000

9. None of what we have said hereinbefore in anyway means that there is any kind of a guarantee. Our asset management charges of 1.89% p.a. works out to Rs…….and is about 20% of the premium paid.

10. The policy is subject to the usual terms and conditions of risk…etc. these 9 risk factors were only with regard to the fund management.

PS: I have no clue where the top management of our company invests. To the best of my knowledge they do a SIP in a mutual fund.

Related Articles:

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

  1. Awesome, Subra can I send you my CV? If I say this to my customer, and my boss finds out, he will sack me. If he does not sack me, I will send u 2 CVs – his boss will sack me for saying this, and sack my boss for not sacking me.

    Have a heart….we need to make a living too 🙂 This is like asking the Server in Trident to say….’Sir a few buildings away you can get Tea for Rs. 100 with similar taste and ambience…why the f…are you drinking tea here paying Rs. 765/-….er..are you a jerk”. It does not happen in real life, right?

  2. Another Gem !!
    Subra sir, you have a keep a guard outside your house now … some one from MNYL is going to knock your door soon 😀

  3. the best thing about this blog gives you blunt messages (good ones) with facts and that too with a great humor in it. I just like it more and more every time i read your posts. you should try a role in Comedy central as a second job, people would love it.

  4. Subra Sir….

    There is saying “Sau Sonar Ka Ek Lohar Ka”. I dont know how to translate this in Tamil. Will check out with my colleague’s.

    Some of your articles are like eye opner. This one is like
    “WAKE UP CALL” ….. I will show this to my wife 🙂

  5. sure Pooja u can send me your cv…but I cannot get you a job, sorry. Continue your bank job without worrying too much about the client. If you start worrying about the client you cannot do the job!

    Bala if you think smart people buy LiC, you are wrong. Smart money has already left LIC. And smart people have moved on to term insurance. LiC’s term plans are expensive…

    there are people from MNYL and they do comment esp on FB not on the blog.

    wealthucreate: itna Hindi jaanta hoon ke yeh samaj sakoon 🙂 by the way I have done Fin Planning and Investment sessions in English, Tamil, Hindi and Gujarati 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>