This post continues on what I posted two days back on IRDA asking Agents to disclose commission.

A friend told me that the idea looks very good on paper, but practical implementation is very difficult. Let’s see how.

The Irda had issued a circular on the “benefit illustration” on January 25, 2008. This circular made it mandatory for insurance companies to take the signature of the policyholder on the benefit illustration stating that he (the policyholder) has understood the policy, before taking the policy.

Even then, I know a lot of incidents where agents sign this benefit illustration document themselves, without going through the trouble of explaining the Ulip to the prospective policyholder. Or they just pass it off along with a slew of documents that the policyholder needs to sign at the time of taking the policy.

Another question here is, how many Agents actually understand ULIP themselves other than the fact that it gives a good commission.

And what about us? How many of us would actually understand how an Ulip works, even if the agent were to try to explain it to us.

I still believe that the real issue is not the commissions but a satisfactory customer experience

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As the regulatory war on ULIPs unfold, my hope is that it will blow the lid on the ULIP con game.

Meanwhile there has been some updates and SEBI is not ready to hold back all its punches even though the FM wants a status quo. So the “status quo” only applies to current ULIPs, it said in an order today. New ULIPs will not be allowed. More details at Deepak’s Blog

I also want to share “My ULIP story” by Daksha Bhat, who is one of the countless aggrieved customers of ULIP. Her experience with the top brass of the Insurer as well as IRDA is an eye opener.

I decided to go online and check the Prudential policy. I changed the password online and the very next day the agent logged in and changed the password himself! I complained to Prudential on various counts:

1.)The seller had altered the requested product in the application form & forged my signature on the change.

2.) The seller was not the Agent – his wife was the agent

3.) The seller had changed the password without my permission

4.) The seller had missold the product.

The Prudential staff I spoke to first said, “yes yes he handles his wife’ business.” One woman from the prudential office called me and asked “what problem do you have with bhai? What has he done wrong to you?”

Later they said this did NOT happen, then I went to the very top and they admitted there was some wrong doing and they had ‘counselled’ the agent!

IRDA did not do anything about this – or about my mediclaim policy. Their one line answer to me was “The company’s answer is conspicuous.” Meaningless is an understatement.

So SEBI – here’s to you. More controls please – and when are you going to make misselling a misdemeanour at least? These guys need to have licenses that can be cancelled if they do anything unethical.

Read her entire post in full details

Earlier posts on ULIP: How to sell ULIPs to unsuspecting Customers

ULIP: Rs 50000 turns into Rs 47000

Open Letter to Kamesh Goyal, Bajaj Allianz Life Insurance

Do you have a ULIP experience to share?

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