Friday, May 30, 2008

How difficult is it to buy a term insurance plan?

We all know that term insurance is the cheapest and the easiest form of insurance. But look at the travails of Business Standard reporter when he tried to buy a term insurance product from various life insurance agents in Mumbai.

Click here to read the story.

This is not an isolated case. We have also had instances of meeting the Insurance Advisors who go on talking about the various ULIP's and other products but never talk about the simple of insurance. We have seen rampant mis-selling of ULIP's by the advisors where the long duration products are sold to people who are in the age bracket of 55 and above.

We once had an opportunity to meet the Sales Development Manager of one of the India's largest private insurance company and the talk went towards what kind of products being sold pre-dominantly. He said he pushes only Unit linked products and when we quizzed him about the term policies he was not even clear about the products and it premium rates. That is the kind of environment we are in.

There is some good news from the biggest of the lot, Life Insurance Corproation (LIC). LIC has indicated that it would sell more of traditional products in the Financial Year 2008-09 and hopes to bring down the percentage of ULIP's to 70% of the total new policies sold.

It is a market where the buyers are to be aware. Caveat Emptor!!

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