Whatis the performance of the Tata AIG Life Invest Assure II Whether is it technically feasible & economically viable for the insurers like me as comared to other Private Insurance Cos. & LIC.?
Myth: Term plans are not being pushed because they are not very remunerative to the agents.
Fact: The commission on term plans is far higher than commission earned on ULIPs. Therefore if someone is saying that ULIPs are pushed to gain higher commission, he needs to seriously check the facts again before passing such comments.
I have purchased a ULIP. I think its a waste of money compared to term insuarance. For the first three years I pay a fat cut to the company for a ULIP. Why should I pay my hard earned money to a company when I can get a better return in the stock market.
RE:TERM INSUARANCE WAY TO GO
by Sanjay on Feb 21, 2007 03:17 PM
Dear Abhinav,
1. When you take a ULIP, as you have said, you only pay a cut of your premium towards admin charges. However if you take a term plan, you will lose the entire premium!!! Do the maths.....
2. If you believe stock picking is a great idea of generating great returns, I wonder why we dont have millions of millionaires in our country!!! After all, thru this route everybody could have got rich without a sweat!!!
Mr.Amar Pandit is absolutely right. Actually only term policy can be called as true insurance and all other insurance products foisted on the poor client is actually to fool him/her. All the illustrations and number crunching excersise is to confuse the client. In fact why the Government is also encouraging this kind of activity is a mystery. Maybe to help the insurance companies and the agents lobby. A wise investor should not fall into the trap laid by the insurance companies and follow the suggestion of Mr.Pandit. By the way why no insurance company does away with the agent and reduce the premium? Without the agent in between I am sure the premiums can come down by as much as 25 to 30%.
RE:Term policy
by ajay d on Feb 19, 2007 03:47 PM
Mr.Subramani, I infer that you are questioning the wisdom of any company(let alone as insurance one)to have a marketing/sales team.Yes, premiums will come down if the commission paid to the agent is passed on to the customer but who will service these policies?My agent takes care of all my renewals,change in address&other paperwork.
And god forbid if there is a claim,I am sure he will help in processing that too.
As for term plans,the problem is not just of the agents but the consumers themselves,how many people actually ask for a term plan?Everyone wants life cover&return on their investments.It's a typical subcontinantal mindset.
RE:RE:Term policy
by natraj tanjore on Feb 19, 2007 03:57 PM
Mr. Ajay D is one of the few lucky mortals, who gets serviced by his agent! I have policies with almost all the private and public sector insurance companies in india and except LIC, most of the insurance company's agent keep changing every year! Also it is advisable to pay the premium yourself, lest the agent forgets to deposit the cheque on the due date! It happened to my car insurance twelve years back and since then i have been paying all the insurance premia my self! The insurance company can reduce the premium for those who opt to directly deal with the company, instead of the agents!
RE:RE:RE:Term policy
by ajay d on Feb 19, 2007 05:31 PM
Mr.Natraj, :)
My car& Life policy gets serviced without any problems.
Also,it pays for an agent to stick on to one company for atleast 5 years simply because he doesn't get paid for renewal commissions if not in the system < than that period.My friend works for a reputed pvt insurer as an Sales Manager&so I have a fair idea of how things work.
Also,most companies give slightly lower commissions on ULIP plans(because those will sell anyway)&so actually there is no incentive to the agent to sell only that.
Yes ,term plans fetch the agent only 1 or 2% commission&so nobody aggressively markets them. For the agent it's his bread&butter&if a Rs 50000 premium gets him only about Rs900/-,he will not talk about it.Why blame them?
We have to understand that Insurance is as much a business as any other&no company which invests 100 crores will treat it as social service.
RE:RE:RE:RE:Term policy
by Lakshminarayanan V on Feb 20, 2007 05:06 PM
I would say in case the agent is not giving proper service, instead of blaming the Insurance Company or the Agent, The customer should directly take the complaint to The Insurance Ombudsman - in that way customers interests are also protected & in the long run, proper service can also be given.
