The Right Insurance Plan

The life insurance plan that would suit you may not be a single policy but a combination of policies that will cover different financial needs

You need to buy life insurance when you start earning. The important question is: How much? What type of plan should you invest in? Your insurance needs are dependent on your financial responsibilities and commitments. And it is important to keep in...

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How much Insurance do you need?

While most of us purchase some insurance—usually as a tax-saving instrument—few of us stop to think if the amount of insurance we have is enough to cover all our liabilities and provide for our families.

While asking friends and colleagues might give you an idea, there is a better way of figuring out how much insurance you need.

First, you should be aware that your insurance needs...

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Twisted logic of MetLife’s Wealth Plus

The deluge of schemes offered by mutual fund houses, insurance companies and other financial services providers have only served to confuse investors rather than easing their troubled minds. Various schemes with colourful names have been vying for investors’ attention, without actually offering a glimpse of respectable returns on investment. While returns have been scant at best, product offerings have adopted fancier propositions, with service providers desperate to sell at all costs. What is compromised is the investors’ real need. 

The latest example is a brand new offering from MetLife India. Its product, MetLife Wealth Plus, is another unit-linked offering that claims to provide a cost-effective wealth-creation solution for customers. But MetLife, which positions itself as a one-stop-shop for all customer needs, has trouble distinguishing which products serve what particular needs of the customer and how its offering meets those needs. MetLife’s sales strategy is a testimony to this.
 
Moneylife Digital has seen an internal presentation that shows how agents and sales teams are indoctrinated in selling unit-linked insurance plans (ULIPs) by highlighting the positive aspects, running down a competing product and presenting some half-truths. The presentation is in the form of check boxes under which mutual funds are shown as products designed to meet the short-term savings needs of the customer. Even lay investors would be aware that mutual funds are meant to provide capital appreciation over the medium- to long-term. Also, while MetLife considers ULIPs not to be cost-effective, as per its internal presentation, it still argues that MetLife Wealth Plus is cost-effective, while the product is just another ULIP. The presentation does not explain how this is so.
 
The Met Wealth Plus plan claims to be cost-effective while providing good returns, liquidity and tax benefits to the customer. Add to this, it offers a guaranteed minimum return of 5%, five years from the end of the subscription period. This is only designed to meet the widespread customer worry about the safety of the principal amount. Of course, even when the product claims to provide a liquid and cost-effective avenue of investment, the costs associated with surrendering the policy are quite high, if one has not paid the requisite annualised premiums. This is not highlighted in the presentation, but the guarantee is.
 
The guaranteed return also tilts the field against a better investment product, mutual funds. The current perverse regulations allow insurance companies to provide a guarantee on ULIP products but mutual fund schemes have not yet been given such leeway. Customers easily fall for this ploy, without realising that this really means little to two products both of which would have the same stock market exposure. Despite repeated efforts, we could not get MetLife to respond to this story.
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COMMENTS

G Vijaya Kumar

7 years ago

I had some bitter experience with Metlife, that initially I preferred for a single term policy but issued with a term policy. Further on querying about the mismatch of my needs they simply evaded my question with a standard answer that the free-look periode over even they had committed several mistakes in the processing of related documents. On being asked for surrender benefit as per the policy terms and conditions, in which some literary mistake/omission committed by the company, they cleverly said that it will be read as conversely though the policy terms and conditions is an indemnified one. The IRDA also becomes a mere spectator as well as the insurance ombudsman who rejected my complaint merely stating that it is not coming in to his purview. The ombudsman till date not replied my mail for the exact reason to reject my complaint. If this the situation where will be end answer for such fraudulent business practices. For the past two years I am fighting with the company for surrender benefit as p[er the terms and conditions.

Param

7 years ago

Use the "free-look" period to your utmost advantage - that is the only arrow in the quiver of an ordinary customer...

In my case, I was thankful to insurance company for pathetic customer service (not even sending the policy document on time), which led me to cancel the policy as soon as I received it. Cheers!

Arhant Jain

9 years ago

What a scam and what a shame. Each instance of Mis-selling found should lead to compounded penalties levied to these firms

dhrubogupta

9 years ago

I have been thru this farce. In my case it was Tata-AIG that I got wacked by and the benificiary was my Banker, HSBC, who had hawked the ULIP. It seems the the scam was imported by the US counterparts whose names appear to give a sense of honest dealings - and we fall for the farang names and never read the very fine print. Is it a wonder that they think India is "untapped" .

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