I received a comment on one of the Insurance related articles from an Insurance Advisor based out of Delhi. When I was just planning to add my reply – there was one more comment/query from one of the readers (you can consider a message from Indian Public). Both prospective were totally different but they had one thing in common both were in deep pain. So let’s hear their stories and try to reach some conclusion.
Pain of Insurance Advisor
Great writing Hemant but still not fully convinced… (He was reading this Article – Why ULIP got banned). I being an insurance advisor can tell you from my experience in this line, for last 4 years now that whenever I am sitting with my prospective client/existing client, the first thing THEY DON’T WANT is TERM PLAN.. To them, this type of insurance concept is FOOLISH howsoever hard I may try… (This I think is also a main factor why an average Indian is under-insured)… (Must Read – Psychology of an Indian When it comes to Life Insurance)
Public at large wants to invest in PLANs which give them good return at maturity (That too in short-term period of 3 to 5 years)… Nobody himself/herself is ready to look into distant future… (The reason why most of them end up their hands burnt, bcoz they check their fund value after 2 or 3 years, found it to be less than even the premium paid – resulting because of upfront charges in the initial years).. If given advice to stay put for long period, they are greatly reluctant..
On top of it, day in and day out we have to hear that agents are making a killing…Now tell me, does anyone give it a thought that how hard it is to procure even a single policy?? I meet on an average 100 people in a month, only 17-18 are convinced to proceed further, and finally 4-5 are converted into final policies/cases… and for these 4-5 cases, I am on the phone for practically half a day every day of the month (Working majorly on Saturdays-Sundays-Public holidays), travelling from one part of Delhi to other (Everywhere in NCR) by my car/bike or metro.. Giving them/sending those presentations/illustrations over mail or hard copies and in return I get 10% to 20% COMMISSION upfront and not more than 3% on renewals… And in lieu of this, client treats me like a slave (Bhai saab, POLICY nahi aayi?? – mere phone number galat chhapa hai); mere premium jama kara ke aaj hi raseed de do kyunki apne accounts department mein deni hai… After a year, calling me over to pick-deposit-return renewal premium receipt and also from time to time, asking me to check his portfolio of other companies (I am an agent for LIC and KOTAK) so giving them opinion, fund value etc for BAJAJ, ICICI etc.. So you think am I making a loot???
The only thing I want to further is please make differentiation between an AGENT and a FINANCIAL ADVISOR.. Please check if your friendly neighborhood agent is a PART-TIMER or otherwise?? Is he working for quite some time or just started out and always bring some SALES MANAGER with him to clear doubts or explain the product?? Or trying to pick the case from the client only by passing on 30% of the commission or paying first monthly installment of the policy?? If he is doing so, he is an AGENT, don’t deal with him, avoid him… But the first thing he advice is TERM PLAN, working full-time for last 3-4 years, has a good client base, then he is a FINANCIAL ADVISOR, trust him – try to grasp as much from his knowledge – and proceed further..
One more point I want to add is, if Mr X wants to take a TERM PLAN for SUM ASSURED of Rs 25 lakhs for 30 years and company Z says that premium will be Rs 8,500… and Mr X is happy and willing to pay this much, how does it affect him if the agent is earning 20% out of those Rs 8,500..I believe policyholder will be effect if company says that over and above this Rs 8,500, he is required to pay Rs 1000 additionally as agent’s commission that should be worrisome and note otherwise..
Please note that a FINANCIAL ADVISOR of an insurance company is working as hard as anybody but it’s just that his income looks like FLEECE to everybody… Please don’t blame the entire FINANCIAL ADVISOR community for mis-selling or mis-deeds of few AGENTS…
So we have heard story of Insurance Advisor now read the query and comment of 1 reader who is representing Indian public. (He was reading Bankers are biggest Mis-sellers)
Pain of Indian Public
Recently an LIC agent approached me and told me that LIC has launched a new “attractive” plan called Retire and Enjoy. Even though I will never buy those idiotic products, I made a search in the net about this one. LIC’s website didn’t even have a mention for that. But agents from all over India had advertised about this. Then I came to know that this is a clever product made by agents by combining many LIC policies. The catch here is that since there are many policies and each are starting on consecutive years, they promise a good commission to the agents, unlike the direct plans which are not attractive after the initial one or two years. A plan just made for the agents and a really big loss for the customer.
My Questions are:
1. Even though this is an agents created one, how come an all India spread has occurred.(Read LIC Wealth Plus) Without a clever central planner and executor, this is not possible. Who is behind this?
2. Does LIC has any roles in this?
Views from my Side : This case is like “No one killed Jessica” I will not add any conclusion or decision as I have already written a lot on it.
I think let readers decide what’s wrong & what’s right – end of the day it’s their financial life. Must share your views.
Insurance Advisor in this post is Mr Dhawal Sharma from New Delhi.
Reader who is representing Indian Public is Mr Shinoj Jose from Bangalore.
Note: This is a story from one of your fellow readers. Please be nice. It is not easy to put your story out in public. Unduly wicked comments will be removed or edited. If you wish to share your story about money – feel free to mail me at [email protected]