Many life insurance companies have a very big advertising budget. They also have a huge budget for spending on the social media, and I am not sure if they are happy with the results.

I am convinced that they are not putting enough effort to make the necessary impact. Let me tell them what are the questions at the top of the mind of the potential customers:

1. LIC is owned by the government does it AUTOMATICALLY not become GOVERNMENT GUARANTEED and therefore safe?

2. Is it not material that the fund managers will be better in a government organization than in a private sector company?

3. Lic has never seen any major fraud – does that not make my money very safe?

4. If life insurance is so important, why does the government not make it compulsory?

5. LIC is the only one which gets tax deduction, right? do you get it for other life insurance companies too?

6. LIC has the best fund managers in the country because they have the experience of handling Rs. 600,000 crores of funds.

7. LiC has the best claim settlement ratio so it must be the best company to buy life policies, right?

8. LiC is very close to the government so it must be getting the best deals no?

9. Specifically I have been told that in case of LiC ALL THE POLICIES are government guaranteed including Ulips.

1o. The Lic agent is known to our family for a very long time…and he does not charge us anything for selling life insurance to us, why should we look for a different agent? ……

 

and many more. No private insurance company has bothered to run a campaign trying to eradicate such beliefs…sad is it not? Now please comment on how many of you have heard this and believe this?

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  1. I heard everything what you have mentioned, that’s why like everyone else by default I bought LIC policies. Then slowly I learned on few things, that changed my mind to get rid of LIC policies … but it was very tough decision.

  2. #7 – resounding NO

    doesn’t matter what the claim settlement ratio is. i dont care if it is 99.999999999999999999999999999%

    what matters is claim settlement experience for that claimant.

    i am dead and if my dependants’ claim on my life insurance policy is rejected, my ghost will be royally pissed off to say the least.

  3. Believing in LIC is quite common.. but I heard a very rare thing one of my colleague told me he purchased MF from SBI thinking it is safe as it is govt

  4. LIC is single handedly responsible for ruining the limited knowledge about Insurance products. Given the almost monopolistic stranglehold of LIC in the pre liberalisation era, they have fooled us long enough. They continue to do so in these times because of the sheer inefficiency of private players. They have become like Xerox. People say ‘LIC’ instead of ‘Insurance’.

  5. Subra,
    My intention was never to claim that I am right. 🙂 Am just saying that #7 was my deciding factor. I personally heard a story where HDFC life denied insurance payout on a very flimsy ground. I may be wrong here. But hey, when you hear stories like that you wouldn’t want that to happen to your dependents isn’t it? Again, just my deciding factor… 🙂

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