An amazing case of an old man (70 years of age) – I hope all of you read this.

Here was a man who was approached by a life insurance agent who pitched him a product. Not sure if he understood anything of what was told or shown, he nicely signed (alas) and parted with Rs. 25L. This could have been a substantial chunk of his liquid net-worth, and he bought the policy in the name of his daughter. It is a different story that she does not need any life insurance.

He says (as a person who is reporting, I have no clue whether he is lying) that it was sold to him as a SINGLE PREMIUM POLICY. However either the agent or the branch manager at his branch converted it to a regular premium product (2% commission vs 69% commission as was explained to me by another manager).

The clients daughter saw this and screamed MURDER! Of course she was not granted an audience. She went to the police, who said ‘maybe the signatures have been forged’. AS usual the life insurance company told her ‘the 15 day free look in period is over’. Well, as usual she was not even allowed to speak, so the case was closed.

Like many people she wrote to Priyanka Sambhav who runs Pehredar on Cnbc Awaaz – perhaps one of their most recognized programs!

Then the rigmarole started. Priyanka’s emails got a response, and to cut the long story short, the company decided to give the client a refund. The client got the money.

Now the client got greedy. They wanted 16% interest! How lovely.

Here was a person who was not even allowed into their office, was wanting interest! Well the company did pay 6% interest.

Why does it take a Sucheta Dalal or a Priyanka Sambhav to shout, scream, threaten for a customer to get justice?

Why does it take Moneylife, or a Pehredar to get a refund for a customer?

What happens to customers who cannot reach any of these people?

I know the person who gave the refund – I refuse to mention his/her name – and that person has spent his/her lifetime in this industry. Does that person not know a mis-sell when he/she sees one?

Why does the @#$%^&&* client sign papers without understanding what he/she is signing? Does it require a PhD in rocket science to know that he/she does not require a life insurance product at age 70? Why could the client not say ‘ask my daughter she looks after my money’?

Why does the CEO not have an internal committee to look at complaints?

Happy to have been part of the program where we discussed this case. By the way did u notice that Pehredar is the only program which calls me for a view? I have now been branded in that category, I presume. Grrrrrrrrrrr….!!

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  1. Subra,
    Don’t you think, it’s general policy to follow “We see no Evil”? And if one does points out (assuming he/she’s an employee), will face loads of trouble from the one who makes decision and has all the control….
    Yet another fact from book of my life 🙂

  2. Hi Subra – Would like to understand one point you have mentioned often before. That a housewife doesn’t need any life insurance.

    I have a slightly different view on this. From a financial perspective, the loss of the housewife in terms of the day-today activities needs to be performed by someone else now. Let’s say a maid. So, this will have a monetary outgo…lets say around Rs. 10,000 a month which translates to 1.2 Lakh a year. So, wouldn’t a policy for at least a small amount help in this case ?

    Request your comments on this please. Thanks !

  3. Financial literacy in our country is too below par. We need a revolution in this field to educate more people (properly). There are zillions (your word Subra 🙂 ) of people who don’t understand insurance and investment are totally different horizons.

    What people think is “If I am paying money, I need some guaranteed (monetary) returns. Else I won’t invest”.

    It is this thinking which is allowing insurance companies to take their undue advantage. They promise false returns (orally) and sell you a crap policy.

    However, in term insurance, you won’t get any monetary returns but you are insured with very less premium. As people don’t understand being insured is the biggest benefit of this policy, they don’t go for it and run after some crap ULIP/Endowment policy in hopes of some monetary returns.

  4. The need for a specific life insurance apart, sometimes the mis-selling is based on a lie that takes effort to get a good hold over. An LIC agent pays us a visit home to explain some new policy and promises a return of 14-16%! He shows his numbers on a paper. Another Max life agent shows his plan and says returns are of the order of 8-9%. When I churned the numbers through Pattu’s calculators, it turned out to be 4.x% or something. Having access to these resources, we could cross check to spot a scam. What of the senior folks who would need to pull out their paper, pen, calculator, and a formula book everytime they need to double check something?

  5. This article comes just in time as I’m chasing a ULIP mis-sell to my father(aged 71 yrs) by a bank manager, no less. This lady sees that a FD in my name is maturing and advises my father to invest in their ULIP. He’s not even told about it but he’s named as the proposer and I’m made the policy holder without even a hint of my knowledge.

    To add insult to injury, the policy is never delivered to our address by courier though the bank keeps insisting they did, so there goes the free look-in. On investigating, I find that the policy was received by the same bank manager who sold us the policy and it never even reached us! Thank God for online statements, otherwise I wouldn’t even have known whose name the policy was in.
    I have raised this with their grievance redressal team for now but any other suggestions to get our voice heard and premium refunded are welcome.

  6. by now the agent was asked to put down his paper and BM has got promotion also…

    This is how this bloody insurance indusrty works.

    Petty for poor agent who might have sold this poicy with mutual consent of BM.

  7. Dear Subra,
    Please name the insurance company and the broker/ bank in all such cases.
    It will help to ” name and shame” as well as to put on guard others dealing with that company/bank/broker

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