Insurance – another case of product mis-selling

In the last week of Dec’09, I had been to the Office of a major Insurance company. And here I witnessed another case of product selling or mis-selling ( How does it matter to the Insurance advisor and the company). Let me share with you the background.

Here was a 62 year old couple, who had taken an ULIP , with a premium of Rs. 1.50 lacs p.a in Jan’09. The policy had not reached the couples residential address for more than 11 months. Moreover, they were informed by the Insurance Advisor ,that you need to invest only once and the returns are in the range of 12 – 15%.
The Sales Manager at the branch states to the couple that one has to pay a minimum of 3 premiums and there is no guarantee of the returns.

This statement only added fuel to the fire and the scene that followed….. well you can imagine.

This and many cases such as these make me think aloud?

Should ULIP be allowed to be sold for a person exceeding age 55 years?
In a free democratic and capitalist country, this sounds far-fetched. But with the kind of product mis-selling happening, one cannot help but think of these radical solutions to protect the citizens from being looted.
ULIP is not a bad product, if the investment horizon is for a period in excess of 10 years ( which is shared with the client as an exception rather than being the norm) .

So my dear brethren, buy investment products based on your requirements. Do understand the type of the investment product .( When you bought your Television, did you not make enquiries and acquired all information about the TV you want to buy , before you actually effected the purchase).


So, buyer beware.