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Novartis India Q4 net profit declines 3% at Rs33 crore

Novartis India's sales rose to Rs204.5 crore from Rs182.7 crore

New Delhi: Pharmaceutical company Novartis India on Thursday said its net profit declined 3.2% to Rs32.9 crore for the fourth quarter ended March 2012 from Rs34 crore a year ago, reports PTI.

Novartis India, in a filing to the BSE, said its net sales, however, rose to Rs204.5 crore during the fourth quarter, as against Rs182.7 crore same period last year.

For the year ended March 2012, the company posted a net profit of Rs152.02 crore, as against Rs146.67 crore in 2010-11 fiscal. Net sales of the company for FY12 stood at Rs844.28 crore, as compared to Rs751.19 crore in the previous fiscal.

The company's board, which met today, also recommended a full year dividend of 200%.

Shares of Novartis India today closed at Rs 719.25 on the BSE in late afternoon trade, up 0.58% from its previous close.

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Personal Finance Exclusive
AEGON Religare: Kum Insurance Dene Ki Bimari?

AEGON Religare has been cautioning the masses against ending up with a low insurance cover. But then why does it insist on selling you a lower insurance cover at a higher premium?

Pradip Kumar Paul, age 43, with an annual income of Rs5,10,024 made an online purchase of Rs50 lakh sum assured (SA) of AEGON Religare iTerm for policy term of 25 years, with a premium of Rs10,449 on April 5, 2012. After the medical test on 14th April, the customer was told that "The requested cover is not justified based on the income evidence supported" and they offered SA of Rs 30 lakh at premium of Rs9,876. Religare was actually asking Mr Paul to take a lower cover! Why is that ironic? Because AEGON Religare, of course, has had a long-running campaign trying to 'educate' the general public on the need to take sufficient insurance cover. The advertisement shows Bollywood star Irrfan Khan highlighting the fact that the Indian masses tend to take less life insurance cover than what they need. According to the ad, not taking sufficient life cover is a disease in itself or 'Kum Insurance lene ki bimari' or KILB. So why was Mr Paul offered kum insurance?

The reason was simple. AEGON Religare was keen to offer 40% lower insurance at almost same premium. It seems the insurer itself is suffering from a disease: KIDB (Kum Insurance dene ki bimari, the disease of giving less life cover).

Stumped by the fact that an insurance company that has been pushing you to buy a higher cover is asking him to take a lower one, Mr Paul asked a lot of hard questions about what is the salary level required for getting Rs50 lakh SA. AEGON Religare, then made a counter offer 28 April 2012 of Rs40 lakh SA at premium of whopping Rs12,494, which is Rs2,000 (or 20%) more than the premium for Rs50 lakh SA. How did Insurance Regulatory and Development Authority (IRDA) approve such a product feature?

Again, Mr Paul protested against the absurd offering and talked with the insurer over the phone. On 14 May 2012, he received email stating that Rs50 lakh SA can be offered only if he cancels an existing ICICI Pru Life term plan of Rs10 lakh SA expiring on July 2012. He argued that there is no point in cancelling before the date even though he will not renew the ICICI Life policy. AEGON Religare stated that they cannot hold the proposal till that time and hence either the customer pays additional premium for Rs40 SA or cancel his ICICI Pru Life policy to get refund after deduction of medical tests and other charges. Either way the customer is at loss. A classic approach from an insurer: either my way or highway.

The question is whether Mr Paul who earns Rs5.10 lakh per annum is entitled to Rs50 lakh SA from AEGON Religare and Rs10 lakh SA from ICICI Pru Life. The answer is an emphatically 'YyeEsS'. Financial planners talk about life insurance cover being of minimum 10-12 times the annual income. That means at least a total cover of Rs60 lakh. AEGON Religare seems to have their own way of deciding how much life cover the person should be entitled. The ad of course says that you should contact AEGON Religare to find out what is your 'right' insurance amount. Now we know the reason behind it. 'Right' insurance from AEGON Religare does not have to be the right insurance. Check its response - "AEGON Religare Life Insurance is not strict about offering a life cover. Depending on the eligibility of a customer, we offer the correct life cover that is 10 times the annual income in this case".

According to Aviva Life, “For a typical 35 year old with an annual income of Rs5 lakhs, he can opt for a Sum Assured up to Rs 1.1 cr (22 times of the annual income)”.

HDFC Life says, “For a Rs5 lacs salary income , a person can have ATLEAST 10 times coverage (Rs50 lakhs). However, the actual coverage will depend on his/her age and underwriting and previous coverage level”.

ARLI restricting the customer to maximum of 10 times annual salary is poor cover offering.

Mr Paul had declared his existing ICICI Pru Life term plan of Rs10 lakh SA while trying to buy the new plan. Why did AEGON Religare not stop the customer from buying a Rs50 lakh policy? Why was he made to go through medical tests and then bargaining of how much insurance cover he really needed? This leads to a crucial issue. Are the rates from online term insurance bait for customers? Is it less for selling and more for publicity? Many times the customer premium is hiked after medical test without giving the report. Companies have innovative ways of trapping the customer.

The most amazing aspect of the whole thing is, of course, pricing. The premium for Rs40 lakh SA is higher by 20% than the premium of Rs50 lakh SA! This cannot be justified by anyone, including IRDA. It beats the basic logic of risk pricing. According to AEGON Religare, "One needs to understand that an increased cover of insurance would make it difficult for the life assured to pay the life insurance premium. To mitigate that risk it is important to go for the correct amount of life cover". Did anyone tell them at AEGON Religare that its Rs40 lakh SA is 20% more expensive than Rs50 lakh SA in this case? They seemed to have missed the point.

User

COMMENTS

uttam

4 years ago

Hi,

i have got a 75 lacs term insurance from hdfc click 2 protect.We insisted for medical strongly but the policy was approved without medicals.I am suspicious pls. help me if there is something fishy about it.

thanks,
uttam

Chiranjib

5 years ago

It is really confusing ! Should I go for pvt. Insurance co. with less premium or for LIC with more premium? Claim settlement ratio of LIC is still better. And Pvt insurers are cheating people with trivial matter.It is not fair on the part of Aegon to burgain with the customer regarding the amount of SA.Whatever max. SA is allowable as per IRDA’s rule with comparatively less premium should offer to the customer.This single case raises question regarding the business ethics of Aegon.

atmadeep

5 years ago

Thanks to ML to publish the artcle and experience of a customer.
We are really confused what to do? What is IRDA's stand in this regard? For settlement of the issue it is very much necessary.What did ultimately happen to him? Did he able to get the policy of his choice? Eager to know.Follow-up article Please.

Atmadeep

5 years ago

I read the article with utmost interest.It is really funny and surprising to know the unilateral decision of Aegon.What did happen to Mr. Paul? Did he able to get the policy at his choice?
It would be better if we know the IRDA's stand in this regard.

PC Bhandari

5 years ago

I bought an Aegon Religare policy in January 2010. The actual terms turned out to be far different to what I was told by the agent. But I learn that IRDA changed the rules only after mid 2010. So any one who bought such policies prior to mid 2010 has no recourse and has to put up with the one sided clauses and higher charges.
Can any one please guide on this subject ?
Thanks

Sukumar

5 years ago

It is a classic example of lawlessness in the Insurance Industry. Why customers are persuaded to purchase 'kum insurance' paid by more premium. Why Mr. Paul was offered 30 lakh SA and subsequently 40 lakh SA when he protested (with 20% higher premium in respect to 50 Lakh SA) when he was interested to get 50 lakh SA .His income level also sufficient for paying the premium. This is really not understandable. Moreover, how is it fair to impose the pre-condition to cancel ICICI's existing policy to get 50 lakh SA.
Moreover Aegon's point of argument "an increased cover of insurance would make it difficult for the life assured to pay the life insurance premium" sounds ridiculous! Crocodile’s Tear! How can Aegon disallow a person's choice to determine the insurance value when (i) he has ability to pay the premium, (ii) medical test conducted and there is no loading, (iii) he really needs it as far as inflation is concerned.
Moneylife has done a good job highlighting the case. It will be helpful for many more future customers of term insurance. By the way, what is IRDA's stand in this regard?

Gopinath Prabhu

5 years ago

I dont know about others but I have tried 2 online term insurances so far.

My first one was Religare. I had 10 lakh term plan with a premium of Rs 2700. Aegon came up with online policy wherein the premium was 6100+service tax for a sum assured of Rs 50 lakhs. When i tried to sign up for the same, the same was denied saying I reside in a rural area where online policy cannot be issued. When I called the toll free number they told i could take an offline policy for a higher premium or give my address in the select cities where the policy could be issue. I declined I did not pursue the matter further.

I later on went to PruICICI which then came up with its Online term offering with same premium for an similar amount. When, I applied, I got the same reply that the online policy was not available to people who reside in rural areas. An email by them said "With regards to your concern we wish to inform you that at an initial stage the policy is launched in 54 cities. On viewing the response from the customers it will be launched in the other cities further. Also the policy can be opted online and this facility or infrastructure may not be available in those areas. Hence it is not available for rural areas now." I could not but laugh at this as Reliance Netconnects covers 75000 towns and villages and BSNL broadband more than a 1 lakh exchanges.

This time I countered by saying no policy in India could be issued to people who reside only in cities and asked them to give me a copy of the approval of plan given by IRDA. PruICICI finally gave in and asked me to fill in the online form using the nearest location from my mailing address. Their mail stated "I wish to inform you that the product is currently available in 54 cities, however we request you to provide your location details, so that we can facilitate the availability of the product to you." and further In reference to your concern pertaining to ICICI Pru IProtect Option II offered by the company, I wish to inform you that the product is currently available in 54 cities.We request you to apply for the product online and select your nearest location from your mailing address."


But if I thought I had won easily I was wrong. I was now informed that the medical test reports had indicated that I am a smoker and now I had to pay up an additional amount of Rs 2262/-. I now asked for the copies of the reports and offered to undergo similar test at any independent lab as i am a teetotaller. After a few threating mails, I was asked to undergo the whole medical test once again at same lab. Surprisingly this time its was ALL IS WELL. Finally after 6 months of paying my premium I got my policy.

Anyone interested to see the mails exchanged between Aegon, PruICICI and me are welcome to get in touch with me at [email protected]. I shall provide all possible help to fight it out.

The standards replies from PruICICI

23rd Oct - Your concern pertaining to the i-protect policy online has been noted by us. We are looking into the matter and shall revert to you shortly

25th Oct - We are sorry for the disappointment and assure you that we will take the necessary steps to minimize occurrence of such instance in the future. Your concern pertaining to the ICICI Pru i Protect has been noted by us. We are looking into the matter and one of our representative will contact you in 2 working days.

26th Oct - In order to address your concern one of our service representatives tried to contact you but was unable to establish the contact. Request you to kindly provide any contact number and convenient time to contact you in order to resolve your concern.

Buyers Beware is the mantra and just dont give up

REPLY

Madhusudan Thakkar

In Reply to Gopinath Prabhu 5 years ago

Thanks, Gopinath Ji for sharing your experiences.Slowly & surely we are heading towards a situation where we will have only ONLINE plans.

Deepak R Khemani

In Reply to Madhusudan Thakkar 5 years ago

Madhusudhanji are you serious!, only online plans ! Do you think every one in India is net savvy and has the time and patience like Mr. Gopinath for following up with a company which does not wish to give Insurance to somebody who actually needs it?

Madhusudan Thakkar

In Reply to Deepak R Khemani 5 years ago

Agar IRDA ka baas Chale to........Please go through following link http://www.business-standard.com/india/n... Like SEBI,IRDA also wants to throw baby out with the bath water.Instead of fixing the problem it is fixing the blame.It is totally indifferent to Agents who are putting blood,sweat & tears ....Mark my words .....Life Insurance sector is also going on Mutual Fund way....

Webmaster

5 years ago

Like all good publications Moneylife follows the standard journalistic practice of seeking the company’s feedback. To say that a company cannot discuss individual cases, as claimed by one ostensible reader is completely false. The company’s communication persons can always discuss cases on an off-the-record basis and every publication would respect this and understand the constraints. Here too, the company has had ample opportunity to respond. Yet, we find postings in different names from the same IP address, all posting positive comments about the company. Please do not abuse the free posting permission on Moneylife by carrying out surreptitious PR and misleading readers with false information, otherwise we may be forced to collate this and report it to the regulator. Only last week, we discovered that a series of comments from a known journalist were on behalf of a leading corporate group. They stopped after we caught her posting from a corporate IP address of the business group.

REPLY

Rupal Oza

In Reply to Webmaster 5 years ago

Wow! I don't know what the problem is. I only know that I am a genuine reader who happens also to be a customer of Relifare. I was quite satisfied with my policy purchase. I cannot comment on the issue at hand.

MLD

In Reply to Rupal Oza 5 years ago

I am glad you said that. There were seven emails from the same iP address. The rest are genuine.
Also, as we say at each of our financial literacy seminar - what you need to know about insurance is that buying it is always smooth and extremely NICE! It is when you make a claim that you are in a position to judge. Or, when you compare what you get against what is in the market. This is a general statement and not connected to this specific article.

Alwyn

In Reply to Webmaster 5 years ago

Wow !! I'm compelled to respond and clarify that I'm a bonafide and satisfied customer.

However I'm intrigued to know the claims on the settlement ratio for my own records and understanding. If the authors can provide the necessary link, it would be great.

raj

In Reply to Alwyn 5 years ago

2010-11 data -

http://www.moneylife.in/article/indiafir...

manoja

In Reply to Webmaster 5 years ago

This is a very good one!!! Even I was surprised that a company like Aegon Religare, which according to the IRDA website has the worst claim settlement ratio, should suddenly find so many admirers!

Now I understand.

Aditya

5 years ago

Hi,

This is an interesting story, but I am absolutely surprised.

I have been owning an Aegon Religare iTerm plan for 51 lacs assured amount since 2+ years now. A few months ago, I was pleasantly surprised that they actually increased by cover by another 13 odd lacs AND gave critical illness cover without any increase in premium!!!

I was pleasantly surprised. My experience with this Company has been good so far.....While neither I endorse nor condemn this Company, it would well be worth in identifying if this has been an isolated case of Mr. Paul?

Samir Thakkar

5 years ago

I have read the article and the discussion threads. I have a few points to present a balanced picture. 1. I agree that taking an individual case up is unfair as company cannot reveal details of the case in media. 2. The impression I get is that the case has not been rejected by the company and discussions are still on. In that case why jump the gun and publish a half-baked piece? 3. The writing of risk is a complex function and takes into account many factors. It is an expert job and cannot be done by laymen. 4.The company carries the risk and thus has the discretion to acept or reject applications basis risk parameters. The journalist is not carrying the risk is he that he talks so lightly of such numbers as 30 lakhs & 50 lakhs? 5. I agree that the company should have dialogued the customer prior to medicals and if it rejects this case should give full refund. 6. The article shows little understanding of risk pricing since 40 lakhs is a non-medical price. It will always be lower for a medical case. 7. The company has clearly mentioned in response 'this case' which is its assessment of the amount of risk it is willing to take on Mr. Paul's life. This in no way indicates that 10 times is a fixed norm irrespective of age and insurability. Quoted out of context. 8. The journalist quotes AVIVA for a 35 year old while the current customer is actually 43. Again a misrepresentation of facts. 9. It is quite clear that ARLI does not 'restrict' the life cover to 10 times as a fixed norm only in this case. 10. While I can understand the need to make sensational headlines this should not cross the line and become malicious reporting which I am afraid is quite apparent in this case. Less knowledge and few facts are dangerous. DISCLAIMER - As an independent financial advisor I recommend as part of my advisory services for customers to buy the cheapest online term plan (often AEGON Religare iTerm). I have many satisfied AEGON Religare customers as my clients. My views however are unbiased by this fact.

REPLY

Sudeshna

In Reply to Samir Thakkar 5 years ago

I read the article and your points of argument with due care since I am also interested to buy an online term policy.I am commenting over your comment since you are an Independent Financial Advisor and to a great extent I am not agreed with you.(i) Taking up individula case is not unfair at all. On the contrary, individual cases make the trends ultimately. (ii) This article is no way a half-baked piece. How rejection is needed to draw a conclusion.It has already sufficient information.You may add that rejection by the company will conclusively prove the deciding factor regarding the goodwill of the company.(iii) How do u support the company's stand to offer first 30 lakh SA and then 40 lakh SA when Mr. Paul protested?This is not fair!(iv) 30, 40 or 50 lakh SA all are 'medical case' here. Then why so differences in the premium?
As a laymen / prospective buyer of term policy I am really eager to know all these.

Deepak R Khemani

In Reply to Samir Thakkar 5 years ago

"As an independent financial advisor I recommend as part of my advisory services for customers to buy the cheapest online term plan".
Lets take this forward, does a doctor prescribe the cheapest medicine?
Will an interior designer buy the cheapest fittings?
Will a dress designer use the cheapest material?
When someone goes out to eat does he or she eat at the cheapest Restaurant ?
Then why in financial services the cheapest is always the best?

Alwyn

In Reply to Samir Thakkar 5 years ago

Well analyzed and eloquently expressed. As an informed buyer I have quite understood the risk profiling process and hence my comment earlier decrying the sensationalism.

Samir Thakkar

In Reply to Alwyn 5 years ago

I see the journalist only replies selectively.

Alwyn

5 years ago

Hi - I have been a reader of Moneylife for a long time and have supported the causes where extreme due diligence has been conducted. In fact Sucheta Dalal is a person I follow across multiple forums.

The article on Religare however reeks of opportunistic bias and sensationalism.

I'm an iTerm customer and purchased one last year and this renewed the same. ARLI in fact walked the extra mile by providing significant reduction in my premium as well as avoided inconveniencing me by endorsing the same medicals.

Even without that fact, their constant interaction and feedback as well as pro-activity has made me feel comfortable as well as assured.

FYI, I had evaluated some of the competing term policies and I can say with authority that theirs was the best premium paid to cover ratio. Plus the interactivity was a huge plus given the difficulty I had communicating with at least one of the competitors.

Therefore taking a case in isolation and painting the entire company black is patently wrongful.Similar written communication available with me would show the company in extra ordinary positive light.

One needs to completely understand the case rather than write a quick story because it can create controversy. We expect Moneylife to do extensive research before going to print.

REPLY

Sucheta Dalal

In Reply to Alwyn 5 years ago

Greetings Mr Alwyn... many thanks for reading Moneylife and for "supporting" our causes as well as following me across forums.
I would love to reciprocate. Would you be kind enough to give me your full name as well as links to twitter and facebook/linked-in. Those are the only forums on which I am and would love to reciprocate.
best

Alwyn

In Reply to Sucheta Dalal 5 years ago

Greetings once again Ms. Dalal -Posting for the record, that I have provided you with the relevant details you asked for above to prove my bonafides. I do support ("support" ?) causes in my humble ways

Sucheta Dalal

In Reply to Alwyn 5 years ago

you may have noticed that i have accepted the linked in request that you sent only after this conversation. And yes, noted ur twitter msg too.
best

Alwyn

In Reply to Sucheta Dalal 5 years ago

Greetings Ms. Dalal - I follow you on twitter and I follow your writings. I used to follow your articles even before Moneylife but I forget the publication name. Guess the impact of your writings was stronger.

Rachna Gandhi

5 years ago

I am an iTerm customer and bought the plan close to a year back. The process was so easy and simple that i also made my friend buy it. The medicals were done seamlessly. They recently launched their new plan and to my surprise they upgraded me to the new plan at no extra cost. In these days when all the agents and insurance cos. are after the money, these guys show that they care for their customers more than money. while buying the plan i was concerned about their claim ratio but after reading about how it is calculated i realised that for a new company (when i bought the plan) the claims received were very few plus my financial planner explained that most of the people who purchase insurance on the basis of fraud try to cheat the company and when investigated, these claims are rejected. This mainly happens if the claim is made in 1-2 years of buying the policy. i thus realised it would not be fair for me to judge an insurance company basis its claim ratio at such an early stage.
Your article appears very strange to me. I agree that you have heard one customer but there are so many who are happy with the company. The idea is to have sufficient cover and not get over insured. Infact they educated all masses with their advertisement of knowing the correct insurance. such educational ads actually make us customers wonder if we are sufficiently insured. I dont think a company like them would do such thing to earn a quick buck.

prakash

5 years ago

excellent article.

IRDA must look this types of issues.

ML already gave the representation on health nd life insurance. Its really very nice,all the issues are perfectly covered.

I must say, those who are not read plz. read.

REPLY

raj

In Reply to prakash 5 years ago

thanks

Sabyasachi Mishra

5 years ago

I first think it is wrong for you to highlight the case of one individual customer as the company cannot send you a reply without divulging confidential details. I also think you should understand that the purchase is online and hence you pay your premium prior to having any dialogue with the company. That is what e-commerce is all about. Also while you insinuate that the company wants to sell you less insurance to make a higher premium have you spoken to any customer who has a sum assured of more than 50 lakhs. How many of AEGON Religare iTerm customers have life cover of over 50 lakhs and even 1 crore; what proportion? If all customers are being offered sum assured below 50 lakhs at higher premiums then you have a story otherwise you only have speculation. Also medical and non-medical rates are different as any rookie will know. Why am i writing all this? I am an iTerm customer. I bought a policy nearly 3 years back. I had a sum assured of 1 crore and had no problem, though issuance took some time. Recently the company launched a cheaper term plan. I was given an enhanced sum assured and also Terminal Illness Benefit as well as the option to attach AD & CI Rider to my policy. My experience has been fantastic and I always recommend iTerm plan to my friend many of whom have bought with cover of 1 crore and more.

REPLY

Sudeshna

In Reply to Sabyasachi Mishra 5 years ago

In this particular case Mr. Paul was offered less SA with more premium. That is the point of discussion. Aegon obviously committed a nuisance. Otherwise how can you explain their decision to increase the SA from 30 lakh to 40 lakh once Mr. Paul protested? If their decision was within rules then how they increased SA offered? I am sure Aegon is not within rules at least in this particular case.

pravsemilo

In Reply to Sabyasachi Mishra 5 years ago

Perhaps you got such treatment because you were an early bird customer?

Bhairon Dogra

5 years ago

The above article seems to be written from the point of view of abusing the insurance company and spoiling it's name. The writer has obviously not bought anything online. Since this is an e-commerce site the submission and form filling right up to premium payment is completely online. Since there is no human intervention there is no way to 'inform' the customer at all prior to purchase. All companies have their own financial requirements and it does not seem fair to show comments by other insurers. Also as an iTerm customer I think at the premium paid by Mr. Paul his age should be above 40 for sure so why are comparisons being given for age 35. This does not make sense. i think writer is biased and has a personal reason for writing all this. I am as a customer very happy with AEGON Religare.

REPLY

raj

In Reply to Bhairon Dogra 5 years ago

The customer had declared about other policy ICICI Pru of Rs10 lakh SA. If Aegon did not wish to give Rs50 lakh SA based on this declaration, they could have refunded the money before the customer was made to take the medical test. Is that not possible or online means no human interventation at any point? The first line of article states that Mr Paul is 43 years.

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