Ranjan Varma

Pay Rs 2.5 Lakh, Get Back Rs 80K March 4, 2011

I am sharing an anguished letter that explains how you can shave off 75% of your investments by giving in to pushy ULIP sellers! The idea of sharing the letter is that you don’t commit the same mistakes.

We all encounter pushy Agents who are hardselling their products. Many of us lack the courage of saying “No”. It’s because we don’t give attention to buying financial products.

The cost of not doing enough research and believing the pushy agent is huge. Read the following letter where the person invested Rs 2.5 lakh and got back Rs 80 thousand after a few years!

The sad news is that nothing much can be done about it as the Insurer has the right to charge surrender and other charges and which is documented in the policy papers that the he customer recieved. The customer may well have blindly signed the benefit illustration document that shows all the charges!

It’s difficult to prove mis-selling and going to IRDA/Insurance Ombudsman wouldn’t really help.

Here’s the letter, below the fold


Hello sir/madam,

I write this mail to you with utter disappointment and anguish.

My father-in-law parked his entire savings in a Bajaj Allianz scheme called Unit Gain Gold Plus. When the consultant visited him to campaign for the policy, he highlighted all the features and got him to sign for a premium of Rs. 2.5 lacs a year.

What he failed to tell him was the surrender value. The agent smartly hid the fact and took the insurance coverage. The policy requires mandatory payment for three years, lest it would attract surrender value.

After the first year, my father in law could not continue to pay the insurance premiums, the sums being very heavy. I now receive a letter of cessation of policy from the company with a cheque for Rs. 80,000.

This has incurred us a heavy loss, and my father in law is unable to recover from that. Please let me know of ways to salvage the money. Again I impress upon the fact that the the agent sold the insurance without highlighting the risks.

We would be grateful for any advice on this.

Thanks, Gayathri


Can you help Gayathri? Atleast help yourself by not repeating the mistake!

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Ranjan Varma has written 468 post on this blog.

Ranjan Varma has over 20 years of work experience in the financial services industry. Ranjan has worked with LIC & LIC Housing Finance in various positions like Branch Manager, Manager Sales, Area Manager, Deputy Regional Manager, etc. Ranjan has experience working in areas like Sales, Marketing, Investments & HR. Ranjan Varma has been interacting on his blog @ http://ranjanvarma.com since 2007, with posts on how to manage money. Ranjan Varma edits a personal finance website and has built products & tools for financial management @ http://rupeemanager.com. Ranjan also delivers training on personal finance. Ranjan has spoken at various seminars/workshops at Corporates and many Educational Institutions. Ranjan believes in Vipassana, a way of self-transformation through self-observation (to see things as they really are). Ranjan also aspires to create new businesses & projects from time to time.

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Pay Rs 2.5 Lakh, Get Back Rs 80K

12 Comments

  1. Lokesh

    bad luck. both are to be blamed.
    why can’t the regulator come up with a simple mandate form [tick mark and sign by customer] of all the necessary FACTS about a particular scheme. Should be made mandatory for all AGENTS to attach with application form.

    *Agent explaned the charges of the scheme Y/N
    *I am aware of the ‘surrender value’ / Exit load Y/N

    sign…..customer.

    is it that difficult ?


  2. Ranjan

    @Lokesh Among the many papers that the agent gets you to sign, there’s one called benefit illustration, which includes everything. Then there’s a cooling off period of 15 days after you get the policy. More than regulation, it’s “Taking responsible financial decisions” is important.


  3. Prats

    I agree that being aware and responsible consumer for the financial products is the best thing we can do and we should do.


  4. Ranjan

    @Prats Yes and I am happy that a lot of young guys are taking it seriously.


  5. Manshu

    This really sucks, and as you point out in the comments it’s just up to the people to figure out this stuff and take responsibility. But, what can these people do now? Nothing right?


  6. Gayathri

    The point in case is that my father in law failed to verify the fine print. When we started getting reminder mails, he called up the toll free helpline and they said that the money that has already been paid will not be reduced. Just that the insurance coverage will not apply if the premium isn’t paid for the first three years.

    But I suppose losing the premium is a little big blow. IRDA should come up with regulation to only deduct admin charges and pay back the rest.

    Can someone offer any advice?


  7. Ranjan

    @Gayathri You can write to the Insurance Ombudsman. List/Contact address link: http://www.irdaindia.org/ombudsmen/ombudsmenlist_new.htm


  8. Ajay Jain

    Ranjan/ Gayathri, My father also went thru the same with another ULIP provider and infact the agent was 1 distant relative. After couple of years he told me about it, I was lucky as tried to find emial ids of lot og higher management in that company and started complaining. After 1 week finally got CEO (leading business entrepreneur family in India) and wrote him and within 24hrs their regional manager travelled from Bhopal to Indore and gave return checque to my father to a gtreat surprise to all of us. So legally/ as per process probably we and you donlt stand to win but write an emotional true story and explain how its cheating senior citizen income etc etc and believe me any human beings wants to do good job at end of the day and sleep peacefully and in my view your father-in-law will definitely get the money back. Will try my best to help in nay way if I can.

    Ranjan, I never wrote to you but you are doing great service to all Indian by educating these things since years…..Thanks, Ajay Jain.


  9. Bajajcare

    Dear Customer,

    May we request you to send us your complete contact details, Policy No. and e-mail-id on help.support@bajajallianz.co.in OR customercare@bajajallianz.co.in.

    Regards,
    Bajaj Allianz


  10. Ranjan

    @BajajCare Thanks for reaching out. It would be great if the customer can be helped.


  11. Gayathri

    Thanks so, so much, Jain!!! Your mail gives me hope, which is what I need right now.

    @Ranjan!! Thanks again a million for doing this. I have already written to Bajaj Allianz. I will write again through this. Thanks so much! I owe you big time if I get back the money!


  12. Vivek

    I agree, ULIPs are quite expensive than MFs.

    As a Thumb Rule, Investors should buy ULIP policies (or any Financial product) within their means i.e., affordable and payable on a regular basis.

    The premium should never be a strain.

    Also, I really hate to find that investors usually pull out of the funds in a short span. Thats really not good. If investor wants to exit out funds in a short span, he is better off investing in liquid debt funds.

    Please, Remember, Equity oriented policies are market-linked and the returns maybe +ve or -ve.

    I strongly recommend Layman Investors to stay invested for more than 15 years. The returns will definetely be Phenomenol in long-term.

    One could consider, saving atleast Rs.500 pm in a good SIP.


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Ranjan Varma

Ranjan Varma has over 20 years of work experience in the financial services industry. Ranjan has worked with LIC & LIC Housing Finance in various positions like Branch Manager, Manager Sales, Area Manager, Deputy Regional Manager, etc. Ranjan has experience working in areas like Sales, Marketing, Investments & HR. Ranjan Varma has been interacting on his blog @ http://ranjanvarma.com since 2007, with posts on how to manage money. Ranjan Varma edits a personal finance website and has built products & tools for financial management @ http://rupeemanager.com. Ranjan also delivers training on personal finance. Ranjan has spoken at various seminars/workshops at Corporates and many Educational Institutions. Ranjan believes in Vipassana, a way of self-transformation through self-observation (to see things as they really are). Ranjan also aspires to create new businesses & projects from time to time.

Pay Rs 2.5 Lakh, Get Back Rs 80K March 4, 2011

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