THIS IS A HUMOR COLUMN.  THIS IS A HUMOR COLUMN. THIS IS A HUMOR COLUMN. THIS IS A HUMOR COLUMN.

Please not this is a column taking a punt at the WORST thing that has happened for the common investor / saver: too many blogs run by too many jerks who do not understand insurance – life or general but are here to sell. This is one such spoof.

It is also taking a punt at the 545,644 people who are being funded by various people to do ‘financial education’ – and ‘financial inclusion’ – the latest 2 jokes in the BFSI space. Very crowded doing more damage.

If Toyota were to conduct a ‘How to buy a car’ seminar, you do not honestly expect them to come to an honest conclusion that “Honda City is the best car in the country for you to buy”, right? then why do you expect that to happen in the BFSI space? hmm…i do not know too, come let us search for an answer…

When you look for term life insurance, bloggers like www.subramoney.com, www.capitalmind.com etc. ask you to buy the cheapest term insurance, that is wrong. This is how you should go about buying term life insurance:

1. What is the Claim Settlement Ratio: IF you were to see only ONE condition in a term life insurance, you must see this. Let us assume that for our shortlisting purposes we use 95% as the cut off, only 3 companies meet our criteria:

LiC, Icici and Hdfc (you can go to the IRDA site and see the numbers, but rest assured other companies do not fit into the criteria, believe me)

THIS IS A HUMOR COLUMN.

2. Online vs Buying through an agent: IF you are not a very active person you may not go for your medical check up promptly, you may fill up the form honestly, you may mention about your parent’s illness, you may tell them you smoke 16 cigarettes a day – all this will increase your costs. So it is better to let a guy come to your house to fill up the form – after all it is so convenient – you just need to sign the form in a few places. So going through an agent makes more sense. It is albeit a little more expensive, but a tad bit. Does it really matter? After all he will even pay your first premium. Is that not great? No online platform will ever, ever do it for you.

THIS IS A HUMOR COLUMN.

3. History of the Company: Make no mistake in Insurance longevity is very very important: “Historically in India it has been proved that companies with a track record of more than 50 years also have a Claim Settlement Ratio of 97% or more” – amazing empirical evidence. So selecting a company with a history of about 55 years or more DRAMATICALLY improves your chances of the claim being settled.

THIS IS A HUMOR COLUMN.

4. In the earlier quoted survey we also found that if the starting letter of the company from whom you are buying life insurance starts with the letter ‘L’  the chances of your claim getting settled are higher. After all Life and Life insurance both start with the letter L – what an amazing coincidence. Even as I write this, I am getting goose bumps. Are you not?

THIS IS A HUMOR COLUMN.

5. Do not visit websites: Yesterday I bought a Sony power bank for Rs. 4990. I was getting it online – MI- for Rs. 898. Why did I choose to buy a Sony in a shop like Reliance Digital? Simple, warranty. And I wanted to be safe about my phone and other equipment. So be careful about what you are choosing. See offline is better, I told you. Always.

THIS IS A HUMOR COLUMN.

6. Cost / Premium: For a rich man like you on a CTC in excess of Rs. 80L does it really matter? Honestly, I found Max Life Insurance and Hdfc Life Insurance to be cheaper than LIC, but again..see rule number 3 and 4 – do you dare risk your family not getting paid? After all like I told you – will you have peace of mind with companies at least 55 years old.

So make your choice carefully. Choose a company starting with the letter L and having a history of 55 years and with a CSR (no no not Corporate Social Responsibility – today CSR is about keeping India clean after making ti dirty) but CSR means Claim Settlement Ratio.

More than 99% of the people who read this post automatically short listed LiC.

What an awesome coincidence. Please like this post and tweet it as much as possible, I am passionate about financial literacy and I want to be of help to society.

PS: Hdfc and Max rejected my wife’s application to become an agent. Even knowing some of the top management people in both these companies did nt help. They said YOU are married to the wrong cynic. Touche’.

THIS IS A HUMOR COLUMN.

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  1. This note is really tragicomic. However, it was wise on subra’s part to generously pepper the page with the warnings!

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