I have no clue why there is so much of noise, sound and fury about life insurance mis selling!

Is there no mis-selling in life insurance? heavens no, there is, but have you really looked around?

Have you seen mis selling happening in the following areas:

Medicine, hospitalisation, education, food, pharma, holidays (ask people who have bought packages from Mahindra Holiday resorts – also visible in its share price), real estate, gold, banking, mutual funds, mortgages, loans for education, loans for  marriage, …etc. etc.

The only place where mis-selling does not happen is bank fixed deposits (cannot), national savings certificates, etc. There is nothing variable so there is no mis selling!! or the facts are known to all, hence there is no mis selling. However fake national savings certificates are very common.

Face it. What hurts us more? One asset class like real estate which takes up 77% of our networth!

Here we do not know:

What we have bought (no common definitions!) – built up, super built up, is parking free, why there is a ‘transfer’ penalty if we sell within 3 years.

An MBA college which says ‘fees is Rs. 6 lakhs, but do not worry, the starting salary average is Rs. 10 lakhs’ – sure Mean is Rs. 10 lakhs, will you please tell me the median, mode and standard deviation also please?

Medical mis-selling is a book in itself. Greed Rules. Rules completely.

We end up talking only what we know and claim to understand. I can assure you that MOST of the people who write about ULIP mis selling do not even know that mutual funds can be created to create a far far superior trail commission. Ha, what do facts have to do with reporting?

Loans is another big area of mis-selling. Flat rates, monthly compounding vs Annual compounding, taking the last 2 instalments in advance, processing fees – no clue why people do not object.

The worst of course is the bank! Now SBI wants money for you to use their ATM, for giving you a statement, for visiting their branches,  – stunning how they want to loot you.

I think I can write about 10 pages on each of the ripping off. What about vegetables which the farmer gets Rs. 2.5 per kilo? and you paying Rs. 30?

Why do clients not ask for a vegetable market where Cauliflower is not priced at Rs. 10 a kg?

The buyer pays Rs. 10.50 and the seller gets 9.50?

fair enough?

hmmmm…..does not work na?


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  1. subra sir have you heard about rajiv dixit…..who was this guy….saw him on youtube…..seemed like a nice bloke….specially….his views on low cost solutions….can you throw some light on this….

  2. I’ve now finally accepted mis-selling to be a consequence of my own ignorance and hence blame myself if I fall a victim! With internet in my palm all the time, Pattu’s calculators in my pocket, all formulae and equations readily available, it would be a little too self-inflicted if I fall prey to a ‘cheesy’ sales pitch.

    What would call –

    1) Sale of fruits and vegetable dipped is DDT?
    2) Acrylamide poisoning through baking soda?
    3) Tainted milk and rBGH?
    4) The Indian made vehicles (primarily TATA, Bajaj, and Enfield)

    I think they are all mis-selling too. But nothing that a little unbiased knowledge and learning won’t help resolve.

  3. Subra sir, another interesting article as usual.
    I am trying to cultivate your simple, common sense based questions based approach to everything in life.
    BTW, which bank do you have your account with?
    I am annoyed with SBI finding ways to fleece us and am researching to make a switch. They never communicated to me about the ‘new’ charges.
    As you always highlight, we are being gullible enough for them to take us for granted.

  4. Farmer in my village, sells Strawberries @ Rs 180 for 2 Kilos (8 packs of 1/4 killo each) and the same product available for anywhere between 80/100 per 1/4 kg.

    I do not buy fruits such as strawberries or Custard apple or Kala Jamoon here in market where

    Have seen lot of other stuff getting misused or overly priced, but do you think a farmer holds any ground here. Govt is happy as long as they are getting their share of money.

    In the end Poor farmer and salried individual suffers 🙂

  5. why there is a ‘transfer’ penalty if we sell within 3 years. Are you talking about within 3 years after possession?

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