I assume from the name that the author is a lady - and from the entirely one sided critique - that she is also a pretty opinionated and uninformed one at that!... Well lack of information is not a crime... but ppl like this should not set out to offer "SOUND" advice to others equally clueless ..
For her kind information - Insurance products straddle the entire spectrum of both coverage and returns... coverage from ZERO to whatever the client wants.... and returns from ZERO to as high as 50% ANNUAL in some cases!! ... With payment terms ranging from ONE year to a LIFETIME!
The fact of the matter is that most ppl - like our author - are clueless about the scope of the business - .. and in all fairness it has been the endeavour of all life insurance companies to put out competent and trained advisors to EDUCATE customers on the subject more than sell!! - Sometime we succeed and sometimes we fail!
I have started investing in Aviva Life insurance amount Of Rs.12000 per anum. Paid 3 quarterly installments,now i realized that the returns are not good with the scheme ,i discouraged my friends from investing in that but how i can come out without loosing what i invested.?
Contrary to what you may think about returns not being good.. you need to understand that an insurance product is NOT MEANT for short term gains. They are there to meet your long term objectives. DO NOT assume that its the same as a mutual fund. INSURANCE IS THE ONLY LONG TERM INVESTMENT OPTION other than Real Estate and precious metals.
I find the tenor of your article offensive and am forced to respond:
Bonus: It is impossible for an agent to quote any amount they want as bonus. The regulator insists on presenting only two scenarios to the customer: one presuming an investment return @ 6 % and the other @ 10 %.
Huge Commissions: The agent is under law obliged to disclose the commission he/she is recieving on the sale. All you have to do is ask! High commission products are not necessarily bad for customers.
You will get a better return on your own: Buy Term and invest the rest is an old trick in the book. Pls do an honest analysis of your saving pattern and you will fig that we are not disciplined enough. If you have not done it in the last ten years the possibility is remote that you will do it in the next ten.
Don't need cover: Cover has nothing to do with dependents. What if you have to live with an illness or a disability?
While there are black sheep in every calling to label the entire community is unfair. Terms like "how not to get tricked by an insurance agent" are derogatory.
Lastly Insurance is the only product where you can ask for a refund within two weeks of buying if you are not satisfied.
Sir, It has been rightly mentioned in this article that the bonus on endowment type policies is not guaranteed. But the Bonus announced every year is not dependent of the "Profits" being earned by insurance companies, it depends upon "surplus" being earned by the company - which is entirely different concept. Had the bonuses dependent upon Profits - none of the new companies would be able to announce bonuses for the next 5-10 years - as this is the minimum time period before an insurance company starts earning decent profits.
I am an insurance agent who does this job at full time, buy talking about the commission you are trying to kick on our stomach, one should understand the pain an agent, as you said there are 13 companies and ever street 10 to 15 agents. In 10 to 15 % commission an agent get average of 6 to 8 lac premium in a year. Which means 10% of it is 60000 to 80000 Rs for this any agent should slog day and night, now as your article said all customers know we get commission and you are exposing more. All this customers ask us how much commission you share with us. Normally we have to share 50% with them.
And what else he will get in pocket? He has to go to that customers at leaset 5 times to get a policy and smart customers call one experience agent and clarify all his/ her doubt and call a fresher and take more commission from them and give the policy to other and wont pick up our call.
And also the commission is given after deducting the income tax.
Generally, the commissions start from around 10% to 15% of your premium. This is for the first premium. So if you are paying a premium of Rs 40,000, your agent will pocket Rs 16,000. A neat sum indeed.
It is not 16000 as he/she writes. Simple maths 6000 only.
If you read the message will misguide everybody. I think Mr/miss Fernand is basially a financial adviser.
Generally, the commissions start from around 10% to 15% of your premium. This is for the first premium. So if you are paying a premium of Rs 40,000, your agent will pocket Rs 16,000. A neat sum indeed.
Pls note 10% of Rs. 40000 (premium) is Rs 1600 and not 16000 as declared above...
The problem is very simple to understand. The Independent Financial Planner (IFP) can have contact with the insurance agents and then he will explain to you about the products and give you those name to open policies from them. This way he will get some more commsion from them also. Ofcourse there is a catch. We can say that he is not a good IFP and in the long run he will loose his business. But there is always a possibility. Thanks,
