ULIPs (Unit Linked Insurance Plan), though conceptually a good financial product which covers both insurance and investment needs, have earned bad publicity due to their heavy front loaded charges. Life Insurers have charged very heavy premium allocation charges initially. And when some Insurers advertised zero premium allocation charge, they tricked the investors by charging a heavy administration charge and not disclosed properly. Relevant posts Link, Mis-selling ULIPs
However AEGON Religare iMaximize Plan offers to maximize your investment by charging you zero premium allocation charge. And the policy administration charge, though a tad high at Rs 100/- per month is reasonable. And if you are net savvy, you can avoid the trouble of going through agents and get yourself insured directly, through their direct sales channels. The experiences of buying from Aegon Religare has been good and it is not only simple but also available at your finger tips.
We had the opportunity to ask Mr. Yateesh Srivastava, Chief Marketing Officer, ARLI a few questions about their online channel and here are his responses. Mr. Srivastava has 21 years of work experience spanning general management, marketing research, advertising, online and digital publishing and marketing financial services. He handles the areas of branding & communication, corporate communications and customer engagement at AEGON Religare Life Insurance.
Question 1: ARLI is betting big on the online space and has the first mover advantage. How has been the mortality experience of this class of online buyers? Is it better than the mass mortality experience?
YS: Overall while it is too early to make a definitive comment, as the numbers of claims are few it, prima facie, does appear that the mortality experience on the online portfolio is better than that of the offline portfolio.
2. Do you give discounts on the mortality table for online buyers since they are better informed, educated, tech savvy and have better income?
YS: Yes and this has been built into the pricing. The iTerm mortality table for online buyers has also been applied to online buyers for the iMaximize Plan.
3. Can we quantify the savings on the distribution expenses because of online buying?
YS: Distribution expenses are quantifiable, as they consist of fixed expenses operational plus commissions. Taking out the marginal operating and marketing expenses, these savings are passed on to the customer to create a differential price advantage.
4. The claim performance was initially a put off. What is being done to streamline the claims process?
YS: I understand your concern. However it is important to understand that new life insurance companies have to investigate early stage claims. A number of cases that have been repudiated, have been found to be fraudulent and some others have been rejected, as they were claims made in the exclusion period. To back this fact up, I would like to state that none of our claim decisions have been overturned by any competent regulatory authority. The claim experience in the online space is an 80% payout. The company is tackling the issues of claims proactively by educating customers about disclosures etc.
5. Can there be a special assurance from the management for our readers in case of any problems in buying and servicing their ARLI policies?
YS: A special assurance is required in case of major problems in buying and servicing of policies. This is not something that we have experienced. We have a regular complaints and grievance redressal process and in the case of the online space we probably provide the highest level of service to our customers. This is borne out by lack of complaints and high persistency in this portfolio.
Any experiences of buying this product? And what’s your take on combining insurance and investment?