Review of LIC’s Wealth Plus

POSTED BY manish ON March 7, 2010 COMMENTS (478)

If you were to hear about an investment plan with 17% p.a. returns i.e. if you invest Rs. 1lac today, it would become Rs. 3.5  lacs  in next 8 years time, wouldn’t you get greedy?And what if it is told to you that such Highest  NAV Guaranteed ULIPs are guaranteed by one of the biggest financial institution LIC of India, it would be Icing on the Cake and a “Never Miss Opportunity”. But everything sounds so good, if looked deeply may reveal something else. Someone rightly said “the big print give it and the fine print take it away”. Such is the case with LIC’s new insurance plan- Wealth Plus.

Game Started in 2007

Every year during the last quarter of Financial Year, insurance agents find new ways to misguide people and make them invest in policies based on false assumptions and promises. Let us take example of year 2007 when LIC launched one of its most famous policy “Money Plus”.

During the launch, pamphlets were distributed in all the nook and corner of the country showing high returns. Eg. Invest Rs. 1 lac for next three years and get Rs.3.38 crores after 20 years at a return of 25% p.a. Based on such exuberant returns printed on a pamphlet and false promises made by agents, thousands and lakhs of investors across India invested their money. Not only did people invested their savings but there were many instances where smaller households sold their jewelry and other personal belongings believing what they were told by the agents that LIC is guaranteeing such high returns.

What LIC have to say

Later when the news of misguided selling of this policy was brought to the notice of LIC management. LIC states that such assumptions are unrealistic and totally false. Investors should not be misguided in the name of LIC. On a letter dated February 12, 2007 to all the Zonal Manager and Sr. Divisional Managers,  Managing Director of the LIC Mr. Mathur himself writes that “The unethical practice of circulating such pamphlets to misguide the public and get business is betraying the trust we built-in the last 50 years.” See the Letter Below (Click to read in bigger Size , recommended)

LIC Zonal officer letter for misselling in LIC Wealth Plus ULIP Policy

Though efforts were made to stop agents to use such pamphlets to increase their business but since the agent community is so big and scattered not much could be done. It was quite amazing that all over India similar pamphlets were distributed and hence it is clear that without the help of Development Officer of LIC such work was not possible. D.O. of LIC also gets commissions or incentives when his agents gives more business to LIC. See the pamphlets Below:

Pamphlets showing returns with Term 3 yrs and investment 25,000

LIC Wealth Plus Misselling Pamphlets

Pamphlets showing returns with Term 1 yr and investment 1,00,000

LIC Wealth Plus ULIP policy misselling pamphlets

Another template with LIC Logo

LIC Wealth Plus Guaranteed NAV ULIP Misselling

What other Govt bodies have to say

Ministry of Consumer Affairs, Food and Public Distribution through “Jago Grahak Jago” also acknowledged that such misleading things are taking place and hence warned investors to refrain themselves from such high return promises.

D Swaroop (PFRDA Chairman) committee on investor awareness & protection states that “The chief cause of mis-selling is the incentive structure that induces agents to look after their own interest rather than that of the customer. If that were not true, the average sum assured of the insured Indian would be higher than the current Rs 90,000.”

 

Now when a income earner of an average Indian family dies untimely, do you think his family will survive for the rest of their life with less than Rs. 90,000? Insurance is meant to cover risk of untimely death first and investment and tax savings are secondary criteria. But we Indians, have been taught Insurance as an investment first, tax savings second and then somewhere in the last we talk of insurance as well. Now again such practice of miss-selling has emerged and agents are targeting with LIC’s new product Wealth Plus.

What is LIC Wealth Plus Product

This product of LIC which was launched on February 9, 2010 (Table 801) states that LIC will guarantee the highest NAV to the investor in the first 7 years and product will mature after 8 years. It nowhere guarantees the return. In it’s official web-site, LIC states that the minimum guarantee will be of Rs. 10 NAV as Rs. 10 will be the starting point. Actually that means that they are not even guaranteeing that you will get your entire money back as there will be certain charges in the policy itself. They have nowhere written that they will guarantee any amount of return to the investor. Nor they have mentioned that your money will be invested 100% into equity.

Now what Agents are telling

  • LIC is giving guarantee on HIGHEST RETURN. (LIC is saying Highest NAV)
  • Now what is highest return? Based on past performance of LIC’s ULIP policy (Bima Plus), you will get 17%-18% return on investment.
  • Lumpsum Rs. 1 lac invested today will become Rs.3,45,693/- or give Rs 25000 for 3 years & get Rs.2,14,690/- after 8 years.
  • You should switch all your  earlier product (on which agents have already made huge commission) into this product as this is something which is as good as KOHINOOR DIAMOND.

To generate such high returns, the money has to remain in equity but LIC nowhere states that. In almost all ULIPs it is clear how much money will go in equities and how much money will go in debt but this policy is silent on the allocation percentage and hence you may land up getting return that of endowment or money back (nearly 6%-7%).

Bima Plus of LIC was a ULIP where it was mandatory for the fund manager to remain invested in Equities in a pre-decided proportion. It was launched in 2001 when the markets were trading at 3000 sensex levels and later sensex touched even 21000. Is it a right approach to compare such high returns which were made during Bull Market and making investor believe that such returns will be now guaranteed by LIC. Now if you go to a small shopkeeper, a carpenter or a young executive and show them that you will get such high return, why he/she will not invest and that too if they are told that guarantee is done by the India’s biggest financial institution, LIC.

We feel sorry to say but such agents who are misleading people do not even think twice before selling such policies in a wrong approach. The fact of the matter is that the money is just not invested in policies but gets invested in someone’s kids higher education, someone’s retirement, some dreams which common man look to achieve.  We believe that

Insurance agents have sold to Indian everything other than Insurance.

Comment from a Reader who is an LIC Agent

Thanks Manish for bringing up this burning issues today. As a agent I can confirm you that these pamphlet actually circulated by LIC office. If you have any doubts go to any LIC branch ask any sales manager or BM they will tell you same. Actually agents sell the product because they are misguided by Senior LIC officials but unfortunately when debate arise agents are vindicated and punished. The projection shown in the phamphlet, circulated to us at the time product launch meeting. For a wealth plus policy LIC given extra incentive to us. But yes you are absolutely true we should think about our client not LIC/BM/DO. It is not true that agents always think about their pocket,they bound to sell product sometime otherwise they face a painful situation. Ask any Insurance company/agent how many term insurance they sell, they wont tell you the truth. IRDA also not interested about selling pure term insurance product otherwise they also issue circular to increase the term insurance sales growth. If this is the situation what will a agent do? Either he has to terminate his agency or keep continuing same practice as Big agents/Insurance Company/IRDA like to do. ( Original Comment )

What is IRDA guidelines says

As per IRDA, agents and Insurance companies are mandated to show return either at 6% or 10%. But the pamphlet distributed have no regards for Regulatory guidelines. Let’s Compare return according to pamphlet & IRDA Guidelines:

Regular Premium Single premium
Premium 25000 100000
Paying Term 3 years 1 Year
Pamphlet 214690 345639
As per IRDA guidelines
6% 87549 118442
10% 114306 161697
  • Figures are approx

Innocent Investors ?

We believe even investor is at fault and not all the blame should be transferred to the Agents alone. It is always “Buyers Beware”. We take well thought decision before we buy even a fridge in our house. We do research which fridge is best for us and look at least 4-5 shops before we finalize. But when it comes to financial products, we don’t really do our home work and at times decision is taken not even going through the pros and cons of the policy.

Now what investors should do?

If you have already taken the policy

  • Cancel the policy if bought under false promises and high projection. The policy can be returned within 15 days of the receipt of the document without any charges under ‘free-look’ option.
  • If 15 days are over, nothing much can be done.

If Not Taken

  • Take your well thought decision before jumping on to this product.
  • Tell your friends about the same.
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Comments ? would love to here your views on Wealth Plus from LIC . Please share what do you feel about it ?

This is a guest article by Hemant Beniwal & Ashish Modani. They both are CERTIFIED FINANCIAL PLANNERCM & writes at The Financial Literates

Regular Premium

Single premium

Premium

25000

100000

Paying Term

3 years

1 Year

Pamphlet

214690

345639

As per IRDA guidelines

6%

87549

118442

10%

114306

161697

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478 replies on this article “Review of LIC’s Wealth Plus”

  1. Ratnadeep says:

    I have invested Rs.40,000/- in LIC Wealth Plus in March 2010, please suggest.

  2. akhil says:

    Sir,i am holding shares of 160000 for the last 6years and those are going to be paid after 2years in 2018 ……whether I had to hold or sell them …. please suggest…..If I sell them now I will get 46200….
    Can understand what to do sir

    1. If you have shares, you can sell it anytime .. Why wait for 2 yrs incase you need money right now ?

  3. manish says:

    sir i m purchased LIC wealth plus policy in march 2010 rs 50000 up to 3 years invested
    now i get 180000 so what is your opinion i should quit or wait upto maturity time march 2018

    1. Better surrender and take the money. YOu should then invest that money in mutual funds if you want long term growth of your money. If you are interested in investing in mutual funds, please leave your details at http://www.jagoinvestor.com/solutions/invest-in-mutual-funds

  4. Rambabu says:

    I have invested Rs.40,000/- in LIC Wealth Plus in March 2010. Please advise shall i wait until maturity i.e. March 2018 or exit.

    1. Better wait till maturity

  5. ramkumar says:

    dear sir,

    HAVE INVESTED RS 50000/- IN WEALTH PLUS POLICY IN MARCH 2010 , now am having 55050……shall i quit

  6. cp singh says:

    sir
    I HAVE INVESTED RS 40000/- IN WEALTH PLUS POLICY IN MARCH 2007 ,BUT IS CURRENT VALUE IN RS OF MY PAYMENT,TELL ME

    1. What do you want to know exactly ?

  7. A. D. says:

    Hi,

    I went through this link
    http://www.ninemilliondollars.com/2012/07/how-highest-nav-guarantee-fund-works-lic-wealth-plus/

    and as mentioned it, we can expect at least debt returns of avg 8-9% over 7 years terms ??

    So anyways instead of redemption in loss, we can have 8% returns in 7 years ?

    Am I correct ?

    1. Its assumption .. On an average they might give debt fund returns ,but nothing is guaranteed . You might still get 5% !

  8. sanjay says:

    Wht to do in lic wealth plus policy? Stay or exit? My s.v is became less than my invested amount.. 10% less than i invested in qtly premium for 3 yrs. Suggest..

  9. A.Alfred Leo says:

    Hi

    I have invested Rs. 1,00,000 in LIC wealth plus in March 2010. Now three years gets over. But when i check the current value it shows Rs. 92,000 only. My problem is whether i continue it or quit and invest in any other bank fixed deposits.

    If i continue this until 7 years., can i get atleast the bank percentage of interest or not?

    There is another choice of partial withdraw.

  10. H.K.Shah says:

    I HAVE INVESTED RS.2000=00 PER MONTH IN LIC WEALTH PLUS PLAN SINCE MARCH-2010 .WHAT I WILL DO , SHALL I GET MY MONEY AFTER 3 YEARS OR CONTINU UP TO 7 YEARS . BECAUSE AS PER TODAYS INDEX I WAS IN LOSS BUT AGENTS SAYS THAT YOU CONTINE UPTO 7 YEARS YOU WILL SURE GET MINIMUM 15 % RETURN
    PL. GIVE ME PROPER SUGGETION

    1. What agent is saying has no guarantee . Its a ULIP product and totally depends on market value !

  11. Sunil Kumar says:

    Sir,
    I am a customer of Aviva Life Insurance Co.Ltd. My Policy No is ALA3095466.
    I am not receive my original policy document till now, I am also inform Aviva customer care and request to hisar Aviva life insurance co ltd branch but they not give me my policy till date 15/09.1012 and ignore my complain.
    Right now I have not any faith at Aviva Life Insurance Co ltd. I am a heart petitions. If I fell any problem and happen some thing wrongs with me Aviva lifeinsurance company Ltd will be responsible.
    When I am go to Aviva Hisar branch Mr. Parveen Khatri see me a fake signature of my on receiving format of Indusind Bank Hisar. That signature is fake signature. I am request to you please help me and provide me original policy document.
    Pls take some immediate action.

    Thank You

    Regards Date: – 15/09/2012
    Sunil Kumar
    H.No. 657 ward No 28,
    Patel Nagar, Hissar
    125001 Haryan

  12. SAM says:

    Dear Manish,
    I went through ur article. it seems to be very informative. I had invested 1 lac in money market plus. How about investing in either endowment plus/bimabachat/ jivan virdhi or jeevan vaibhav. which is better. Could u pls guide me. I am not interested in continuing with money market plus

    1. Better surrender money market plus and start with mutual funds !

  13. vijay vishal says:

    Hey Manish,
    Good job here.I went through this blog.Despite of my little knowledge about all this I found it quite useful. It can be a base to refer before makig any investment.
    Actually I was also planning for some investment. The range can be 1 lak. Need ur guidance, naturally my requirements will be the highest return but totally safe. I have already taken SBI Flexi smart Insurance for 25000 per year. Please provide ur insight about this plan. Kindly suggest me other combinations for investment with the above plan for 75000.

    Thanks and regards

    1. Vijay

      For investment related questions ,you can ask it on our forum – https://www.jagoinvestor.com/forum

    2. mahesh parmar says:

      manish

      you are wrong

      i invest rs.50000/- in mutul funds in 2007 and i got rs 35000/- after 5 years

      while i invested rs. 100000/- in lic market plus at the same time i got rs. 122000/- after 5 years so in my view lic is best rather than mutul funds
      i think that mutul funds give you some money for marketin while lic dindn’t

      if you came to my office i give you all proof for above details with red. vouchers
      don’t misguide the invester

      1. Mahesh

        You are biased for that particular 5 yrs only . Wait for 15-20 yrs . Also can you share the performance of the same mutual fund in 2003-2007 ?

  14. rajeev says:

    dear manish…….

    please give me a suggestion i go for LIC endowment policy jeevan aanand + term insurance of 1 crore+ a medical family floater plan

    or
    term plan+family floater plan + ppf (insted of jeevan aanand)

    my age is 28. annual income 6 lacs

  15. Anup says:

    Hai Manish ,
    I have invested in Wealth plus plan and paid 3 premiums of 30000 (yearly). Now I have 8381 units

    1. If I want to withdraw money now, can I get full amount I have paid?

    Are there really any benefits of this policy? is it advisable to surrender this policy now?

    Thanks for your support and guidance

    1. What is the current NAV of the policy ? You can multiply that number (NAV) with your units and see what is the FUND value, you will get that

      1. Sasi says:

        Hi Manish,

        I have been paying Rs.5000 per quarter in Wealthplus and it is almost over excepting two more payments for 3 years. So, I have totally paid so far 50000 till now. After the completion of 3 years payment period, if I withdraw the amount, will I get the highest NAV or at the current NAV rate only. As per the current accumulation of units and the current NAV rate, the amount will be much lesser than what I have invested so far. Will it be beneficial if I keep the amount till 8 years?

        1. The highest NAV is applicable only if you continue the policy for minimum 7 yrs . If you sell now , you will get current NAV value!

  16. Roseann Schroader says:

    Thanks for the wonderful article, I was researching for details like this, going to check out the other articles.

  17. LIC Policy says:

    LIC bima account policy with down payment and useful policy for investors according to your budget.mostly people are don’t know this policy so you have loss of money and capital.

  18. Satish Tiwari says:

    Dear Manish,
    first of all very congratulation for your ironic connotation over the underneath of fradulancy occured in insurance company.The comment made by you are proven facts and perhaps only the persons who have been in indulged in such a drained way will discard you. You have prooved that government sector copanies are also promoted reaping out maximum profits at any cost. You are once again very congratulated and hopfully will meet us with new article.

    Satish Ch. Tiwari
    Researcher
    Banaras hindu University

    1. Thanks Satish 🙂 ..

  19. Saurabh Mishra says:

    Hello Manish ,
    I have invested in Wealth plus plan and paid 2 premiums of 20000 (yearly).
    I know it has 3 years of locking period.
    1. If i want to withdraw money after 3 years , can i withdraw full amount i have paid? what will benefit get?
    2. Also provide details if i wait till 7 years , what are the benefits?

    Are there really any benefits of this policy? shall i discontinue it after 3 yrs?

    Saurabh

    1. Saurabh

      BEtter stop paying premiums and get the FUND VALUE after lock in period , look at your policy document and what are rules if you stop premium before 3 yrs

      Manish

  20. Rajeev says:

    Hi Manish,

    Thanks for your help.Now bank agent not able to hypnotized me for their investment plans.
    I want to know is it HDFC TAX Saver good option.I am planning to invest 50k every year.
    Thanks for your advice.

    1. Rajeev

      Yea HDFC Tax saver is a good option . Its a long term performer

      Manish

  21. tejeshwar says:

    manish,

    My goals and requirments are as:
    i want to invest 1 lacs to save tax a every year and want to have this money invested in
    1) long term health (yet to decide the plan) plan for me and my wife:- max premium 7000 per year
    2) Family protection plans(AVIVA ilife-35 years term with SA-10000000)–7000
    3) Money back plan 20 years -SA-300000 (LIC money back 20 years already going on ),insurance
    4) Bharti AXA life aajeevan anand money back plan with critical illlness ,loan facility premium 15000 for 10 years–it’s providing insurance to age of 100 years
    5) 30000 fixed deposit per year for next 5 years .After that will renews these fd every years if interest is good.
    I have left with aound 10000-15000 which would love to invest in short term plan

    Please suggest if i should continue with lic endowment plan as i have paid only 1 premium of 25000 for it.

    Tejeshwar Saini

    1. Tejeshwar

      Most of the things you have already decided .. I think there can be lot of simplicity .. please avoid the POLICIES … Nothing except plain FD’s , PPF and Mutual funds

      Manish

  22. tejeshwar says:

    Thanks Manish for your valuable advice..i will definately take U turn from here..

    What would be best,secure and high yielding option for fututre as i don’t want to invest further in mututal fund ,market plans and LIC?

    Can you please assist me here with some good option for FY 2012-13 where i would go for investmeent of 1 lacs for tax saving.

    Waiting your valuable advise on it!!!

    Tejeshwar Saini

    1. Tejeshwar

      Why not Mutual funds ? or Other debt options like ETF etc .. note that the product is not bad or good , its your intention with whch you have invested and your suitability ..

      What are your goals and requirement , lets talk about that

      Manish

  23. tejeshwar says:

    Hi Manish,

    I have inveseted in following LIC’s plan:
    1)endowment plus in 2010 and will be paying 25000 each yrs. for next 10 yrs.
    is it going to be good ? Currently it’s in growth fund .

    2) I invensted in LIC market plus in 2009 and have paid three annual premiums so for and again it’s invensted in growth funds.my querries are:
    Should i continue with same growth option ?
    Should i pay further premium or adjust it from the premium amounts payed so the 4th and 5th year.It will help me invensting those 25000 rs. somewhere else may be in FIXED deposits and at the same time as per LIC agent i will get the premium receipt of 25,000 rs. for 4th and 5th year by adjusting the premium from the amount payed in last 3 years.
    Please suggest??

    Thanks!!!

    `Tejeshwar Saini~

    1. Tejeshwar

      The long term returns out of your Endowment plan can be extremelly low like 3-4% .. better not continue with it

      Manish

  24. Kamlesh says:

    Hi Manish

    Please advise me which Company is better to go for Term Insurance.

    Thanks

    Regards
    Kamlesh Bhangadia

    1. Kamlesh

      You have options like Aviva , Kotak or LIC

      Manish

  25. Ashal Jauhari says:

    Dear Amit, it’s 5K Rs. yly for the 50L term cover & 55K Rs. yly in the PPF. The 5K figure is an indicative one & actual prem. may change depending upon your age.

    Thanks

    Ashal

  26. AMIT says:

    thanx ashal n thanx manish
    thanx for ur useful advice rather i want to ask u about is it 5k /anum or it is 5k/month.

  27. AMIT says:

    hi manish
    im investing rs60000/ anum on lic jeevan saral with death benifit of rs1250000,and accidental benefit for rs1250000 , while on birla sun lifeon investment of rs65000/ anum they provide policy with risk cover of 2200000 and accidental cover of rs 2200000. total 4400000 on accidental death
    jivan saral claims 2473000 sum assured + loyalty and bonus= not fixed but claimed by agent is around 10000000+/-10000 for 35 years term.
    while birla sun life’s agent claimed 11900000 on bond for the same term.
    i took the jeevan saral on feb 2010 haven’t yet paid the 2nd half yearly premium
    should i get insured by birla sun life as they offer better insurance cover as well better and guaranteed returns.
    regards
    amit

    1. Ashal Jauhari says:

      Dear Amit, How about getting a 50L term cover for 5K Rs. & investing the remaining 55K Rs. in a simple product like PPF for next 20Y or so.

      Both policies are not providing enough cover which should be the prime aim of any insurance policies. In my view go for a Term Plan + Investment (in the instrument of your choice)

      Thanks

      Ashal

    2. Amit

      I agree with Ashal Reply

      Manish

      1. AMIT says:

        thanx ashal n thanx manish
        thanx for ur useful advice rather i want to ask u about is it 5k /anum or it is 5k/month.

  28. Sathish says:

    Hi Manish,

    I have a doubt regarding LIC Wealth Plus.
    I have some 4500 units currently with me in Wealth Plus. The highest NAV so far in 11.0528. Eventhough the current NAV is 9.46.

    So, my fund value is 4500 X 11.0528 = 49737.6.

    Am I correct with my calculation?

    1. Satish

      No , highest NAV till date is 11.0528 , but you will get the highest NAV only if you get out of the fund in 7 yrs , if you exit before that then you get the CURRENT NAV only .

      Manish

      1. Sathish says:

        Thanks for your reply Manish. I like really like the site very much and keep the good job up!

        1. Good to hear that .. keep visiting

          Manish

          1. K. Jaganathan says:

            Hi Manish,

            i am working in Lic Agent for last 8 years, but i am working in slowly.
            my client take lic wealth plus policy, please i want this policy highest Nav on till date status.

            Please help me.

            1. You can get NAV from the website !

  29. Rajeev says:

    Hi Manish,

    I am thinking to invest 70k in LIC ,Jeevan Tarang Plan. Is it good decision.Also I m planning to invest in Tax Saver MF. Please let me know your concern
    Thanks

    Rajeev

  30. Priyabrata Hazra says:

    Dear Manish Bhai,
    Once i need your advice. If u kindly give a review of Max New York whole life participating plan & Life gain plus plan. If u kindly analyse the polices with ppf , mf & recurring deposit it will be very helpful to me.
    Thanks

    1. Priyabrata

      I would say you ask this on : https://www.jagoinvestor.com/forum/ .

      Manish

  31. VARUN GUPTA says:

    Dear Manish,
    Read your article which was very very informative. i invested 80000 per year for 3 yrs in this. what should i do now?

    1. Varun

      you can now withdraw money from it . Not sure how is it performing , see the performance recently .

      Manish

  32. Sudhakar Menon says:

    Dear Manish Bhai,

    There are lots of private Insurance Co in India. They mislead customer like anything. And what I got to know is, in ULIPs LIC’s agents commission is 75% less than private insurance co.

    Bhai ek baat samaj main nahi aya ke why you have targeted LICI only.

  33. Priyabrata Hazra says:

    Dear Manish Bhai,
    Once i need your advice. If u kindly give a review of Max New York whole life participating plan & Life gain plus plan. If u kindly analyse the polices with ppf , mf & recurring deposit it will be very helpful to me.
    Thanks

  34. Pingback: LIC Wealth Plus
  35. Priyabrata Hazra says:

    Dear Sir,
    I’m interested about term insurance, I’m 38+ , if I take LIC Jeevan Amulya, term insurance for 15 years shall I myself get the maturity benifits
    thanks

    1. Priyabatra

      You dont get any maturity benefits in Term Insurance, thats the reason the premium are so less , if you need maturity benefits also then you will pay huge premium which kills the purpose

      Manish

      1. Priyabrata Hazra says:

        Thank U for your reply. Very sorry for late response.
        Sir, LIC has come out with Endownment Plus Ulip policy — under the new ulip policy. How is it, sir.
        Also my humble request start a discussion form for Financial Planning as well as discussion regarding various investment option like gilt funds, bonds, commercial papers, liquid funds etc & open ended mutual funds.
        thanks

        1. Priya

          I hve not review the policy , but ULIP will mostly be ULIP 🙂

          What else do you want to know , ask on our forum

          Manish

  36. ranjan kumar thakur says:

    My policy No.385219972 lic welath plus NAV.I want please be send by email. Thanks

    1. Ranjan

      What do you want ?

  37. mukesh chaudhry says:

    dear sir,last year i had invested 20000 p.a in lic welath plus and next premium is due on 27 feb?kindly suggest wat should i do?
    thanx

  38. uchako says:

    I have taken LIC’s Jeevan Anand last year and paid 1st prem. of around rs. 20000/-. this year its showing accured bonus of rs. 14,000/-. secondly i have invested for my first child education endow. plan 5 yrs back. total investment around rs. 32000/-, now its showing accured bonus rs. 21,000/-. But getting info from this site i have stopped these policies. so now i am confused whether i am right or wrong ?? plase can anyone explain ?? however for info i have taken a term plan of rs. 50 lacs from sbi life of rs. 11000/ annual prem.

  39. Dilip Golani says:

    why would you go for insurance plan? Do you want life cover go for term cover it is the cheapest and rest you can invest in post office Recurring/mutual funds/equities as per your risk appettite and requirement

    1. Dilip

      Yes , thats what we generally suggest here on this blog 🙂

  40. Kiran says:

    Hi Manish,

    Need your suggetsion, what you think of ICICI Pru Pinnacle II now, with PAC of 6%, 5%, 3%. This is 10 years plicy, but just pay premiums for 5 or 7 years only i think. Please suggest

    1. Kiran

      There is no reason why I like that policy , why not invest in Mutual funds ?

  41. sivabalan says:

    Hi Friends,
    My name is Sivabalan,
    I have decided to start invest money through LIC Insurance Policy(New Bima Gold-179). for 25 Years.
    Can any one Suggest me is it correct .
    Or is there any alternative better then this policy.
    i don’t knw whom i have to trust..
    please Help me out friends.

    1. Sivabalan

      Its not recommended . The returns u would get out from the policy would be in range of 4-6% only . See : https://www.jagoinvestor.com/2008/10/why-endowment-policy-are-never-best_08.html

      Manish

  42. Ramesh says:

    Hi Manish,
    I wanna clear one small doubt from you regd NAV…
    Curretly LIC wealth plus NAV is 10.45 roughly.
    If the highest NAV is 20 , how to calculate the maturity fund.
    Does NAV 20 means it doubled the money we invested?

    Regards,
    Ramesh

    1. Ramesh

      Yes , for you NAV is everything , so if you buy at nav 10 and at the time of sell NAV is 20 , then your money doubled .

      Manish

      1. Ramesh says:

        Hi Manish,

        Thank u very much for ur immd reply…
        btw I gained lot of knowledge from ur articles..
        The one bad thing I did was I read all ur articles after I invested in LIC Wealth Plus… 🙁
        Hope ur articles and this website helps me my future investments.

        Regards,
        Ramesh

    2. Dilip Golani says:

      no your money is not doubled just becuase the nav is doubled it is true in case of mutual funds but in insurance it is a different ball game the nav is the reflection of the unit price but the actual no of units will be less because the insurance companies deduct charges every month by cancelling of units so in some case it may also happen and has happened that though the unit price (NAV ) has doubled but the actual value may be less than invested kindly check you policy document for recurring monthly charges which can be as high as 5% of invested amount.d

  43. Avinash K Patil says:

    Is there any free look period of 15 days for two wheeler insurance policy?
    i.e can a conusmer say after booking the policy online surrender the same within 7 ir 15 days? Pl guide?
    Avinash

    1. Avinash

      I dont think so , I have not seen it . Are you aware of it or have head about it ?

      Manish

  44. Vijay Kumar says:

    Hi , My self Vijay Kumar from Hyderabad working as a Sofware Professional in a MNC. I am Planning to take a LIC – Insurance schema, with the knowledge i have choosen ‘Jeevan Saral’. With a yearly premium of 72K.
    & The Agent is giving a commision of 25%.

    Please advice me to take up this or not?
    Also guide me with the other plans.

    1. Vijay

      Dont take it , Endowment plans are not the smart choice in today’s world and you should not take commission back from agent . Its illegal . the Insurance products give returns of around 4-6% in long run and the situation can be pretty messy if you want to get out in couple of years . Ask your agent what will happen if you want to stop the policy in 2 yrs and 5 yrs and how much will you get back , you will be amazed 🙂

      Manish

  45. Dhanish says:

    Can you explain what is it regarding ?

    1. Dhanish

      Its all about show some agents are misselling the product .

      Manish

  46. Ravindra Tripathi says:

    Respected Sir,
    Yesterday I got a pamplet claiming that LIC Market Plus I (Table No 191) Claiming that scheme is going to be closed on 30 June 10. Three Attractions are climed in the pamplet: –
    1. 3 Year lock in period.
    2. No extra charge on surrender.
    3. Investment without Insurance cover. (Nivesh Bina Bima cover ke sath uplabdha).
    I wish to bring especially third comment to your notice and wish to know from you that Can a insurance company provide for investment without insurance cover. If yes then what is role left for SEBI. Kindly through some light.

    1. Ravindra

      As per the new guidelines from IRDA , the ULIP’s can be without insurance cover from now onwards , and even top ups have to be with cover .Not sure how they are providing this ? CAn you give a screenshot of the pamphlet .

      Manish

  47. krunal mehta says:

    Hi, Manish,

    Everything is alright, however any inquiry have been done on investment part of LIC, that how much going to be invested in equity market ?

    I have come across Birla sunlife mutual fund, they are giving the gurantee of highest NAV and also specifying fund which will invest in equit only.

    Once we get assurance that at least 70% will be invested in equity then this guarantee is worth, because in share market rise & fall is part of game, so once highest NAV achieved they are bound to give that NAV.

    However birla mf is going to declare such NAV at 15 days gap only, so will they play any game in declaring NAV ? further their charges are on higher side say about 10% every year allocation charges over and above fund management & policy charges.

    I think other private companies offering this disclose the manner of investment, then LIC should also declare as investing in debt and guaranteeing is joke.

    1. krunal mehta

      All the companies offering Highest NAV plans reserve the right to invest the money in 100% Debt , so you cant get guarantee that money will go in equity for sure always .

      Manish

    2. samrat roy says:

      Mehta Ji,

      I beg to differ that you have come across Birla sunlife mutual fund, because no MF has Allocation Chzs (instead thr might be Entry Load), or Policy Chzs (instead there is AMC). You have come across a Policy from Birla sunlife Insurance Co Ltd. Moreover no MF will ever Guarantee you on anything. And please, dont consider LIC to be a Saint among the goons. I have seen LIC offices distributing manipulated and forged Pamphlets. So please, keep your eyes, ears, senses open while proceeding

  48. Sreedevi Konnalli says:

    Hi Manish,

    Can you please comment on LIC’s Pension Plan – Retire & Enjoy.

    Thanks,
    Sreedevi

    1. Sreedevi

      Its a regular pension plan , not recommended . you can do better with mutual funds .

      Manish

      1. Sreedevi Konnalli says:

        Thanks Manish,

        Mutual funds are for short term investments.
        Please advice for long term ones like after retirement.

        Regards,
        Sreedevi

  49. Rakesh Goyal says:

    good Article and Ad by LIC …but as u rightly said this is whut the Buyer behaviour..i suggested my clients not to took such plans …even avoid ulips ..better is combination of MF and term plan …but they purchased ulips and nav guarantee plan …saying that it was their close freind who insisted ..or it was his relative so they cannot refuse…in some cases they were paid good commission for such investment ……so my hard work went in vein ..no use to guide them

    1. Rakesh

      Yes .. most of them fall because of Emotional atyachar and take these products which are burden for life .

      Manish

  50. rahul says:

    Hi Paras,

    Ans-
    1. Current 1 unit price is Rs.10.
    2.Dont know.
    3. Latest NAV price – http://www.licindia.in/plan_navs.htm

    Please correct me if I am wrong.

  51. paras says:

    Hi,
    Still, after reading this article , i can not understand , how agents are making fool to investers. They are telling abt the highest NAV over firts 7 years, investor will get. How the highest NAV can be 0 in 7 years. I am planning to buy wealth plus. Could anyone please give me detail understanding? how or where i can see the NAV at the present time and compare it with the past 7 years? . If i invest 50,000 in this paln, what is the price of 1 unit? Please help.

    Thanks,
    Paras

    1. Paras

      Can you list your questions in numbers ? 1) 2) . like this .

      Manish

      1. paras says:

        Thanks for reply.
        1. what is the price of one unit at present?
        2. They say that max nav will be counted over first 7 years. Is it possible that it can go down from the current price?
        3. where i can check the current nav price and compare it with last 7 years?

        paras

  52. rahul says:

    Hi Manish,

    After all reviews… I have cancelled my plan to take LIC Wealth +. Thanks you save my money!!
    Pls advise which is the best mutuual fund in market right now? or any other plans.

    Thanks.

    1. Rahul

      There is nothing called Best mutual funds , its always what is the most suitable mutual fund for you , which is not a short answer 🙂 . read the articles on the blog and you will understand how to find that out .

      Manish

  53. Rama Rao

    great to see how you thought about the whole situation and handled it .

    You should look at term insurance for insurance and balanced funds for investments , you can have real estate also , try ETF’s and some gold .

    Manish

  54. Rama Rao says:

    Manish, to be frank i have no clue about the available funds in the market and how they are doing. You could say i am one of the millions of urban Indians who are financially illiterate. Someone tried to sell me wealth plus and it struck me that if they are promising highest in 7 years they have to be investing conservatively .This ULIP would have been a good one if not for the highest in 7 years trap which i read above many people are falling for .This kind of gimmicks further erode my trust on these financial institutions and make me stick to FD’s and other avenues. I am 40 and is high time i concentrate on kids education and retirement ,i am open to suggestions on insurance and investment.

  55. Rama Rao says:

    If you do a deep dive on wealth plus. The catchy marketing slogan of highest NAV in 7 Years, is actually the biggest drawback of this policy. If LIC is promising highest NAV in 7 years that means they will invest this is in very conservative instruments which might return 6-8%, the reason they will not invest in growth funds is obvious the NAV fluctuates wildly in growth funds and if the NAV reaches 50 at any point in 7 years ( wishes come true:) LIC would end up paying that to all the customers of this policy,which will be a disaster for LIC.By Investing in conservative instruments LIC will keep its promise of giving highest NAV .The cost of 1 lakh of investment in wealth plus is around 32,000 Rs ,So you think investing very conservatively LIc can help you recover the cost of 32% and give you decent returns? hahah no way.

    1. Rama Rao

      Yes .. you got the point clearly 🙂 . what are your views on alternatives then ? What kind of investment can one do with the money if they want to do better than Guaranteed funds 🙂

      Manish

  56. Ashish Kushwah says:

    Hi Manish.

    thanks for such a nice and detail analysis on Wealth plus. actually i wasplanning to take this, but now i am totally aware.
    could you please suggest me any other investment plan, which can give good returns ,even without insurance.

    1. Ashish

      Look for Mutual funds , its not the products alone which determines your returns, its more than that , discipline, consitency , timing also sometimes .

      Manish

      1. Ashish Kushwah says:

        thanks manish. if we consider time period what could be the minimum time period for any MF. should i go for SIP. , what are factors which we neeed to keep in mind during taking a SIP . any good SIP, which you would like to suggest.

        1. Look at archives section ,there are articles where i have suggested good funds . go for equity only if you are looking at long term , dont invest in equity for short term like 6 mnths or 1 yrs .

          Manish

  57. Sathish Nagaraj says:

    Hi ,

    I have been investing Rs.70000 per annum for the last three yrs in LIC Money Plus .
    . Kindly suggest if i should continue investing or should i stop wit this investment and wait for next 17 yrs. Its current NAV is Rs.11.5 . Kindly give me an idea on the likely NAV by 2027.

    Sathish

    1. Satish

      Its not possible to project the NAV from this point , you should quit if you can not handle this ULIP .

      Manish

  58. Kamlesh says:

    Hi All

    Investing in LIC is much more safer than any other Private Company.
    Please IRDA Website and find the Annual Results of all Insurance Company.
    You will see almost all the companies seems to be in RED and our own LIC is only in GREEN.

    When it comes to service LIC is far better than any other Private Life Insurer.

    Atleast LIC gives you a minimum growth of 9% in any Endowment Plans, Compare the same with any other insurer, they will not print maturity amount on Bond, they will only show returns on Paper.

    I will prefer every one investing in LIC rather than investing in any other insurance Firm.

    1. Kamlesh

      Talking about just Profits is not the right thing , most of the companies are new and they will require some time to breakeven , you can see SBI has already done that . others will follow .

      Which endowment plan give 9% compounded return ? can you please name ?

      manish

  59. sudha says:

    Hi is it worthwhile taking a pension plan in ICICI super pension plan or any other pension plan. does it provide a solution to the pernsioner?
    In the icici direct website retirement calculators are provided are they genuine?
    Iam drawing a gross salary of Rs one lakh per month & im investing Rs 5,000 in PF & 35,000 P.A in pension plan please advise me should i continue my pension plan or should i increase my PF

    1. Sudha

      You are also victim of thinking that those “cute” looking plans from companies are the best solutions . They just cousins of ULIP’s , called ULPP . the same structure of ULIP’s .

      The problem is that they are complicated enough for layman investor . there are simple ways like mutual funds , Index Funds ,ETF’s , PPF , Real estate and term plans using which in combination once can generate a decent corpus with less work .

      Look at mutual funds as main invesment vehicles for your retirement . its time to be aggressive in equity as i assume you are in lower half of your career .

      Manish

  60. sudha says:

    Manish your article really helped me a lot. can u give me sugesstion i have a term insurance & a ulip plan now i wanted to invest where i can get a better return.how about investing in gold bees (gold etf) will the gold market price rise?

    1. Sudha

      thanks , nice to know you are loving the articles. Its a tough call to predict gold prices and its movement . they are as complicated as others . I would say you can include some 5-10% of portfolio , but look at them from stability and balancing factor, but not for returns . Try ETF’s

      Manish

  61. Mandip Chawla says:

    OK manish i think you are a very against of insurance and specially lic wealthplus.
    ok you talk for FD what returns you get in bank FD you know that on maturity of FD tds is deducting & it differs from bank to bank.
    In Wealth plus LIC guaranties for highest nav it means that lic is selling units for RS10 now it means that returns will be not less than Rs10.
    You know that if person dies during term so he gets full risk taken plus current fund value also you don’t think that it is a good thing in this policy.
    In whole world it is first time in ulip that after maturity also persons risk cover continue after policy term also for 2yrs absolutely free without any charge.
    Mandip Chalwa

    1. Mandip

      Its not against just one product , LIC Wealth Plus is example , same is true for other pvt companies plans too .

      But what is your opinion about investing in debt oriented funds for that long period . Debt oriented funds like UTI mahila unit scheme have given performance which is uncomparable to debt products . they have very small exposure to equity and given returns in range of 12-15% .

      Dont you feel its always better to invest in them and have a very limited risk . These funds score better than these guaranteed ULIPs or atleast endowment plans in terms of Cost , liquidity and simplicity .

      I am talking about the opportunity lost in these 7-10 yrs. do you really think that in a fast developing economy one should be investing in non-equity linked products for long term ? If yes, then I dont agree with it .

      In that case its just a matter of opinion difference , which is fine 🙂

      Manish

  62. rahul says:

    Hi Manish / Mandip,

    Thanks for ur responce on my query….

    Please suggest me where should I invest money apart from Wealth+.
    I want tax benift and I can invest for 3-5 years not more than 5 yrs.

    If You have any policies fix returns numbers please share with me.

    Thanks.

    1. Rahul

      Did you see my reply ? I said that “There is no such guarantee . I am sure its just a verbal communication from agent , Is it written anywhere that it will become 3 times ? I dont think so .”

      If your agent told you that its going to become 3 times for sure , he is lying . Why do you still want to go for it ? The tax season is just over and you have plenty of time to think about your investments and plan for it . This is exactly what we are trying to change through jagoinvestor .

      Dont look at just tax savings . there is much beyond that . your approach should not be like this towards your investments . Take time .

      If your time horizon is 3-5 yrs , then you can invest in ELLS funds(risk ,high return) or Tax saving FD (no risk , less return)

      Manish

  63. Mandip Chawla says:

    You can buy wealth plus policy it is a nice one.
    But i don’t think that it will give this much returns.
    You can get almost 2times of money you invest

    Mandip Chawla

    1. Mandip

      If its going to become 2 times only , in 7-10 yrs . How come you rate it as a nice one . In that case dont you think debt oriented funds or balanced funds should be recommended for such a long term .

      Manish

      1. Vimal Kumar says:

        Hi Manish,

        Read your article and would like to say thanks as you have saved my money.

        I have Daughter of 1 yr and would like to invest some money for 15 year.

        Kindly let me know the best plans which has insurance facility with primium waiver benefits.

        Thanks in advance.

        Regards,
        Vimal Kumar

        1. Vimal

          I will not recommend child plans for child planning at all . they just give you an impression that they are excellent tools . Go through : https://www.jagoinvestor.com/2010/01/5-easy-steps-to-do-your-childs-education-planning.html

          Manish

      2. sujit says:

        For that matter Post Office -KisanVikas Patra doubles money in around 8 & half years …….Can anyone compare its advantages & disadvantages with LIC Growth Plus……

  64. rahul says:

    I have confirmed here that the Wealth Plus is wealth plus comes undr tax benefit and money will gets 3times of what we invested at the time it was launched.

    I am planning to invest 1,20,000 per year. Agent is giving me 5% discount on first premium.

    Please provid me your reviews. Also please let me know what is last day of Policy.

    Thanks in advance.

    1. Rahul

      THere is no such guarantee . I am sure its just a verbal communication from agent , Is it written anywhere that it will become 3 times ? I dont think so .

      Manish

  65. Mandip Chawla says:

    Ok Manish i doesnot mean it

    But i am with you & i am fully agree with agent misselling ulips.

    You can mail me for any query about any insurance plan of any company i will try to compare that product.

    Mandip Chawla

  66. Mandip Chawla says:

    I am against all private insurance companies which are fooling our indian citizens & irda is supporting them.

    Hey Manish pls tell me what you do.

    Mandip Chalwa

    1. Mandip

      I should say lets not be against any company , but be against misselling . I have nothing against products , its against the way they are sold .

      Manish

  67. Mandip Chawla says:

    Did you know that lic has given a dividend of more that 80000 crores till now to govt of india against 5 crore given to lic to start business in 1956.

    I agree that agents are selling ulip plans without giving a proper information to client & it is a bad thing but irda issues licence to such agent why irda is not taking any action against such agents.

    Mandip Chawla

  68. Mandip Chawla says:

    Hi all,
    Don’t be so rude to LIC, LIC is a goi company its true but you have to agree that lic is following 2 regulators already IRDA & It’s own LIC ACT 1956.
    Did you know that if any insurance company give total insurance of 100Rs to any person then that company has to pay a solvency margin of security of 150Rs to IRDA (its not include product returns only persons death cover includes)
    You will be surprised that till now not a single life insurance company except LIC has given single solvency margin to IRDA.
    Did you know that lic has paid a total solvency margin of 153% (its about more than 32000 crores) to IRDA in 2006-2007.
    I am not against in any private of state own insurance company but don’t be so rude about our own LIC.
    LIC invest its 91% of funds in welfare of our country.
    LIC has invested more than 150000 crore in govt infrastructure to grow our nation.
    There is no proprietor of LIC. LIC all profit belong to its policy holder. (5% to govt & 95% to policy holders)
    About this event, LIC has received notice from SEBI & LIC has answered to that notice may SEBI will be satisfied with that answer & not ban it.
    LIC has already said to sebi that it is ready to take any license to invest in Market but isuue must be clear by sebi & IRDA.
    I tell you that i am not a insurance agent or any official of lic but i love my country and i can’t here any obligation to any govt company which is hepling us to grow our country.
    A true indian
    Mandip Chawla

    1. Mandip

      You have to understand that its not against the company “LIC” .. its against the agents and officials who are involved in this . As a company LIC is not even a living entity . This all is about the lower level staff who are primarily agents and some officials , again its not about every agents , its a handful of agents who give bad name to others .

      Manish

  69. Ban on ULIPs.

    🙂 🙂 “I’m lovin’ it” 🙂 🙂

    1. Prashant Ashar says:

      new twist IRDA sets aside SEBI’s order on ULIPs

  70. sumit says:

    yes wealth plus comes undr tax benefit

  71. sumit says:

    what you said about money plus was some how correct .
    it was all due to the mis selling of pvt players what they were telling about ulips . lic agents who r not too professional also started selling their product money plus as they were selling, but all professional advisors was not selling it by saying the same, the investors was coming on their own to invest their money in lic , than what they can do , good agents also said that it is not true but the money u r invest will be safe in the hands of lic. that what happened their money is safe as accordance with that of pvt players.

    IN EVERY ULIP THERE ARE DIFFERENT KIND OF CHARGES WHICH EVERY INVESTORS NEED TO KNOW PROPERLY.

    if u compare the charges of wealth plus of lic, it is very less as compare to other pvt comp.

    u was also talking about bima plus return which was giving more than 20% in equity fund , who is saying you to focus on equity fund that is named as risk fund of lic , you can also see the secured fund where all the money is invested in govt sec and there our money gets 3times of what we invested at the time it was launched , according to this if lic not invests it wealth plus amount in equity and invest in govt sec than also the highest return is guaranteed.

    1. Better to buy govt bonds directly then , no reason to go through ulips, what do you say ?

      Manish

  72. rahul says:

    Can anybody confirm if Wealth Plus comes under tax benifit or not?

  73. Y. Shrinivas says:

    Dear Manish,

    Due to complex features of the Plan, Wealth Plus is not notified for Tax rebates by Finance Ministry. Beware. LIC’s website or official broucher is keeping mum on this aspect.

  74. rahul says:

    Also please let me know if LIC wealth plus plans comes in Incom tax saving plan.
    Please reply here. Dont have e-mail access.

    Thanks.

    1. Rahul

      Definately , it comes in income tax saving . Any product which is ULIP comes under 80C

      Manish

  75. rahul says:

    Hi,

    I am planning to invest 1,20,000 per year in LIC Wealth Plus plan.Lic agent is ready to give me 5% discount on first premium.

    I am interested in short term investing plan.

    Please suggest.

    1. Rahul

      No !! .. please dont invest in ULIP , especially for short term . ULIP’s are not short term products at all . Why dont you go with normal tax saving FD’s or tax saving mutual funds , are you a total “no risk taker” ?

  76. Srinivas Muthadi says:

    I would like to tell my experience with Max Newyork. I took ULIP in 2006. The agent gave be the documents only after 15 days. I did not understand the logic at that time. Now I understand that he made sure that the free look in period is exhausted, lest I change my mind and cancel the product, and he lose his moola. 🙂

    1. Srinivas

      I am hearing this type of case a lot now a days . Sad

      Manish

  77. ashish deshpande says:

    Hi all… There is no point in arguing whether these NAV guaranteed schemes will give handsome return or not.

    PPF : 8% return
    NSC : 7.5% return
    Bank FD : 7%

    So if u want to have return more than this…

    Invest in

    Equity : 30-35% return in Long term
    MF : 15-20% return in 5 years (thru SIP)
    Both of above not giving any guarantee return.

    Time Horizon for Wealth Plus : 7 years, which is niether small nor long… It is a perfect time horizon to remain invested… since it will have both cyclical boom and doom…

    Wealth Plus plan is atleast giving guarantee of highest NAV over 7 years…. and also there is extended risk cover of two years.

    So in my opinion we shuld go for LIC wealth plus…. One of my friend who is also CFP, is advising his clients to go for this…

    Bye and Happy investing…

  78. himanshu says:

    Hi,

    Its realy a good work to aware people before investing their hardearn money.

    keep it up.

    with regards,

    himanshu

    1. Himanshu

      Thanks 🙂

      Manish

  79. kanika says:

    manish
    u r doing an excellent work…..i support ur views and am a part of ur online revolution.

    1. Kanika

      Thanks a lot . I hope you all readers will help in spreading the word about this online revolution 🙂

      Manish

  80. Amit says:

    Guys, very interesting and informative article, kudos to you for running such a site.
    Let me tell you my story with guaranteed NAV.
    I bought a Birla Sun Life maximizer policy in 2005 with a staggering 60,000 Rs premium / year.
    When I saw the illustration @ 6% and 10% they conveniently forgot to deduct the MASSIVE admin charges and showed all of my money as invested in ULIPs the truth was those @@$%%%%^^ invested only 30% in first year and about 60% in second year of the 1.2 Lakh I paid.
    The principle was guaranteed for this fund now in 2009 when my total investments were 2.4 Lakhs and I had to pay another premium my fund value (at maximizer with latest NAV) was barely touching 2 Lakhs. Now frustrated I was I surrendered the policy and then came the fine finer print. The principle guaranteed in the 4th year was till the 3rd year meaning in 2009 when I surrendered my policy what was guaranteed was 3 premiums not 4, for 4th I had to wait one more year that is till May 2010 and I would then have got 2.4 Lakh Rs. So logically my NAV was higher so I took back the policy at 2 Lakhs. Here is my wealth:
    2005-2009: Invested: 2,40,000 Rs
    Return in 2009: 2,00,000 Rs
    all because of a sundry dream of highest NAV and Greed.
    I think it is time we bought these robbers to justice and let them face the music.

    BR,
    Amit

    1. Amit

      Sad to hear your story , but its story of all the people who were missold the policies and didnt came to know about the charges ,even people who are in profit are unfortunate because they dont know that they could have made a lot more . This all happens when we forget basic things and take things for granted .

      Thanks for putting your points .

      Manish

  81. ramkumaran says:

    Thanks for your analysis and efforts, also i read through the policy fineprint , which posts a set of charges which seems to be very high for me those are given below, this can be found in http://licindia.in/wealth_plus_benefits.html

    ) Mortality Charge – This is the cost of life insurance cover. A level mortality charge based on the age at entry will be taken every month during the policy term by canceling the Policyholder’s Fund Value appropriately.
    The level charges per Rs. 1000/- Basic Sum Assured for some of the ages in respect of a healthy life are as under:

    Accident Benefit charge – It is the cost of Accident Benefit rider (if opted for) and will be levied every month at the rate of Rs. 0.50 per thousand Accident Benefit Sum Assured per policy year.
    C) Other Charges:

    Policy Administration charge – Rs. 60/- per month during the first policy year, Rs 25/- per month during the second year and thereafter, from the third year on wards till the end of the policy term Rs. 25/- per month escalating at 3% p.a. These charges will be deducted on monthly basis by canceling appropriate number of units out of Policyholder’s Fund Value.
    Fund Management Charge – This is a charge levied as a percentage of the value of assets and shall be appropriated by adjusting the Net Asset Value (NAV) at 1.00% p.a. of Fund Value.
    This is a charge levied at the time of computation of NAV, which will be done on daily basis.

    Guarantee Charge – A charge of 0.35% p.a. of the Fund Value shall be levied for the cost of investment guarantee.
    This is a charge levied at the time of computation of NAV, which will be done on daily basis.

    Bid/Offer Spread – Nil.
    Surrender Charge – Nil.
    Miscellaneous Charge – This is a charge levied for revival and alteration within the contract, such as change in mode of payment to higher frequency within the premium paying term decided in the beginning of the contract, Grant of Accident Benefit after the issue of the policy etc..
    The flat charges for revival shall be Rs. 500/- and for alteration shall be Rs. 250/- which will be deducted by canceling the Policyholder’s Fund Value appropriately and the deduction shall be made on the date of revival/alteration in the policy.

    Service Tax Charge – A service tax charge, if any, shall be levied on the following charges
    a) Policy Administration, Mortality and Accident Benefit rider, if any – by canceling appropriate number of units out of the Policyholder’s Fund Value on a monthly basis as and when the corresponding Policy Administration, Mortality and Accident Benefit rider charges are deducted.
    b) Premium allocation – at the time of allocation.
    c) Fund Management – at the time of deduction of Fund Management Charge.
    d) Guarantee – at the time of deduction of Guarantee Charge.
    e) Miscellaneous charge – on the date of revival/alteration in the policy.
    The level of this charge will be as per the rate of service tax as applicable from time to time. Presently, the rate of Service Tax is 10% with an educational cess at the rate of 3% thereon and hence effective rate is 10.3%.

    1. ramkumaran

      Even though the costs look higher (which they are) , compared to other Guaranteed NAV plan , they are lesser .

      Manish

  82. Y. Shrinivas says:

    Dear Manish,

    All Insurance cos.have to mandatorily get the signature of customers on 6% & 10% benefit illstration sheet alongwith proposal form for all ulip plans. It is strictly followed by all pvt life insurance cos. and its agents but in LIC it is not at all followed. This is the the point where the agents and officials of LIC are able to mis sell.
    Even IRDA is sitting pretty well with closed eyes. Can anyone from this forum will be able to open the eyes of IRDA.

    1. Y Shrinivas

      thanks for the info , not sure why IRDA sits back and does not do anything .

      Manish

  83. sandip says:

    Thanks for ur article ,can u give any idea how much can an agent earn by selling a lic policy.

    1. Sandip

      they earn close to 25-30% in first year , upto 7.5% in second and then 5% of commission

      Manish

  84. KS says:

    Hi All,

    I took Wealth plus policy(50K single premium), just to save tax in last minute hurry. Please can any one of you tell me how much returns I will get after 8 Years. Or is this better to withdraw policy after three years? Any suggestions are well come.
    I dont know much about investments, some says MF is good, some says FD is good, some ULIP, I am really confused a lot. Please suggest me on this.

    Thanks
    KS

    1. Manjunath

      If you are in a freelook up period , you should surrender back the policy . Else take it back after 3 yrs now .. Returns from this policy can be tricky , some CFP’s are saying 10-11% , some are saying not more than 8% at the end .

      Start reading about the subject on this blog and you will get good Idea .

      Manish

      1. KS says:

        Hey thanks Manish for the needy response in time. I did a mistake by not looking into the policy details in depth. In last minute hurry I end up like this. Let me try in some PPF, Its better I think.


        KS

  85. Navin says:

    Hi Manish / Hemant,

    I have a question i’d like your suggestion on.

    If i’m okay with an avg 11-14% p.a. return on this product (Wealth Plus) throughout it’s 8 yr tenure, you think it’s a decent product to invest in? Fortunately, i’ve been wise to not even consider their pamphlets as ‘possible reality’. I understand that MF’s might provide higher returns in the same period (of 8 yrs), but there is a risk of downside too right (NAV’s falling below your purchase price). While in this, you’re at least guaranteed your purchase NAV (minus charges though).

    Please advice with your thoughts guys. Thanks!

    Love and Regards,
    Navin Sadarangani

    1. Navin

      No Navin you are thinking totally in wrong way . First of all , who told you that dont consider it as “possible reality” ? Was he an agent or not ?

      Other things is returns , dont expect it to be 11%-14% .. that what we expect from normal Equity in long run .. the returns from these funds can be in range of 9-11% , Alsoy the point is these are ULIP’s and have higher costs .. So you can get what these Guaranteed NAV products give from other debt products , for example consider debt oriented funds , which have 10-30% in equity .. they are very safe (not totally) and can give returns in range of 11-12% (historically) .. see the data on valueresearchonline .

      Manish

  86. Nilesh says:

    I tried reading most of the comments. And really appreciate the work you guys are doing! Kudos!! But reading all the comments (or the few I could read :)) being a confused buyer as always, I am still not sure what LIC policy should I buy to secure myself financially?? :O. Please help.

    PS: I have 2lac Jeevan Anand policy and only other I have 5 lac Jeevan chaaya for my kid as suggested to me by friendly agent. Please Please help. Also I would love to part of any en devour you guys take. I am ready to help for the cause.

    Confused Buyer.

    1. Nilesh

      we dont not recommend endowment plans foranyone . better look at these articles .. start investing in MF + Term .

      https://www.jagoinvestor.com/2008/10/why-endowment-policy-are-never-best_08.html

      https://www.jagoinvestor.com/2008/10/pillars-of-success.html

  87. @ All readers

    Money Life Article that looks inspired from our article

    Money Life: Mis-selling of LIC policies continues

    Extract

    “Agents are painting a rosy picture and promising guaranteed returns to clueless investors”

    “Often, agents show a performance chart to the investor which is invented by themselves and not LIC. The performance chart shows impressive compounded annual growth rate (CAGR) returns of 20%-25% over a period of one year.”

    “Numerous misleading advertisements of LIC are being circulated in regional languages carrying a logo of LIC, in smaller towns. These ads promise astronomical returns.

    Apparently LIC is not responsible for publishing such misleading claims but it is the agent who takes investors for a ride. Usually the product literature is not on the letterhead of LIC.

    “There are umpteen instances where clients are promised exaggerated returns. One of them was promised a return of 35%. This example is just the tip of the iceberg,” adds the source.

    Earlier, LIC’s Money Plus—launched in 2007—was also rampantly mis-sold by distributing pamphlets promising unrealistic returns.

    The reason for this mis-selling is the high commissions doled out to agents.”
    http://www.moneylife.in/article/8/4412.html

    I request all readers who are reading this please share below link with your friends, so that we can save many more financial lives. Still we have 20 days (including 15 freelook days of April)

    https://www.jagoinvestor.com/2010/03/how-do-highest-nav-guarantee-plans-work.html

    Every effort counts.
    Your friends need your advice on this mess.
    Please help them.

  88. vineet maheshwari says:

    I like the above topic regarding how agents misselling in the market. Jagoinvestor really work well for this direction and I appreciate for this topic which is very required for debet in the present scenario.

    1. Vineet

      Thanks for the comment .. keep coming 🙂

      Manish

  89. Pingback: On some LIC Plans. « it's all about money honey
  90. Alagappan M V says:

    http://www.licindia.in/wealth_plus_feature.html

    whether above plan is a gud one? ..LIC wealth plus .unit link insurance plan

    plz advice

    1. Alagappan

      thats what we have discussed here in the article . see this https://www.jagoinvestor.com/2010/03/how-do-highest-nav-guarantee-plans-work.html to understand how it works .

      Manish

  91. gangadhar says:

    Dear LIC Agents And DOs/AAOs,
    bhai log janta ko bewkoof bana chhodo aur kuchh to sach becho.
    kab tak GOVT company ke nam par lofo ko thagoge…….?
    Realy a nice article…………………

    1. GangaDhar

      Its not just LIC , its same story with All Insurance Companies ..

      Manish

  92. Abhishek says:

    Hi Manish/All

    Have seen the article above and the comments. bit confused 🙁 . need some advise. I have to invest 20k more this year for taking 80c benefit and want to invest in ulip/MF plans.

    I am seeing 2 options :
    1. SBI Magnum taxgain scheme
    2. LIC wealth plus.

    can anyone advise please where should I invest from above.

    many thanks
    Abhishek

    1. Abhishek

      Better invest in Mutual funds through SIP .. SBI magnum is a good choice .. also look at sundaram tax saver .

      manish

  93. Devendra Dave says:

    This is right. When I went my client and show them 6% and 10% Illustration they told me that LIC gives us that much money. And this is Government company so Agent told that nothing can be with you money and you will get this amount (as per pamphlet) sure. Also there is a tradition by LIC Agent that they will pass on their commission to the customer ignoring IRDA rule. I am selling privet companies insurance and I have been asked for commission back. I never pass on and leave business. also show them 6% and 10% illustration with all charges so they can understand the product.

    Inverter must pay all the premium without fail if they want healthy amount after retirement.

    Thanks, Every comments acceptable.
    DD. – Financial Adviser

    1. Devendra

      thanks for your comment .

      Manish

  94. Elayaraja says:

    This article really nice.I don’t have much idea about the policies and used to follow the agents words.Hereafter i will think twice before i go for it.

    1. Elaya Raja

      Great to hear your comments and your acceptance that accepting what agents say is a mistake , did you read How these Guarantee funds work ? Do you understand them ? see : https://www.jagoinvestor.com/2010/03/how-do-highest-nav-guarantee-plans-work.html

      Manish

  95. gaurav says:

    HI manish ,
    i have been reading your blog thru and thru fo the past 3 weeks have read it i can say cover to cover !!! its really addictive and am amazed to see u r age and the depth of analysis u have …me am 29 /mba and still am in awe of u r knowledge …..
    ok a quick one 3 years back i took bajaj allianz capital unit gain size one and have paid all 3 premiums till date , 25k per anum now i am planin not to pay !!! its an acturial product i guess and they keep cancellibg my units what is u r suggestion ……continue or stop and wait ??
    also do u suggest the top up route if any (eg to get max invest in without much charge)
    OR u recom mutual funds …btw just started SIP s in mutal funds recom by u …dsp /hdfc 200 /rel growth / rel reg savings ) 15k a month .
    this bajaj capital unit ulip one erks me as i feel i did it without understanding it.

    1. Gaurav

      ULIP’s can give good returns if you can manage it .. Are you interested and have the taste of Equity markets? can you switch on right times ? If not .. then the whole purpose of ULIP is gone .. thats the strength of ULIP’s . If not .. better get out of it and start MF and other routes like ETF , balanced funds .. Make sure you look at surrender charges because you close it .

      Manish

  96. Mark says:

    Hi Manish,
    Thanks a lot for posting this article.
    My monther in law told abt this product to my family and other relatives and everyone wanted to invest into it, kind of “Gold Rush”.

    Here’s what my sasu-maa was told by an agent.
    “Invest 60k, 20k each yr for 3 yrs and at the end of 7th yr you’ll
    get 3 lakhs!!.
    Wait, 2.5 to 3 Lakhs are guaranteed and if there’s any profit
    you’ll get more than 3 Lks !!!!”
    Can you beleive this ?
    I asked her who’s making profit ? She told me the answer she got from
    agent, ” the money invested into this product will be given to Ambanis and other business
    houses and when they make profits it will be distributed to policy holders
    after 7 yrs. !!”

    It’s a clear case of how people are robbed in a day light.
    Just imagine how many Indians must have invested into this and other schemes.
    Why can’t government/ IRDA/SEBI.. I don’t know what agency is responsible … but
    some one should (Like the Courts take Suo-Moto )take this seriously and punish the culprits.

    Thanks once again for posting it.

    Mark

    1. Mark

      That translates to 37% annual return , can be guaranteed by any sane individual 🙂 . Saas Agent and Sensex !! .

      IRDA is responsible for what Insurance companies do ..

      Manish

  97. Puran Chand says:

    Hi!
    Its nice to see that someone is there who really doing a good job. I salute your efforts for the same. One thing which disturbs me that this article portrays a very negative image of LIC agents, its true there had been such practice but not by everyone. I am in this field since 4 years & anyone can ask my customers regarding my presentation & promises for any particular plan. One more thing I would like to inform you that BIMA GOLd is a money back plan not a ULIP plan.
    Thank you.

    1. Puran

      THanks , Yes I understand that not all Agents are bad , we are talking about majority here ..

      Manish

  98. Dilip Golani says:

    The practice of mis-selling is not only limited to wealth plus only it is also rampant in other endowment policies particularly Jeevan Saral a monthly recurring policy where returns shown are more than post office recurring but actually they are less than 5% p.a and in some case where the age is above 50 you don’t even get the premium paid due to high mortality. I am a LIC Agent since last 16 years but don’t sell LIC’s ulip’s and jeevan saral and hence facing the irk of the D.O and the branch officials if you don’t sell you are humiliated and your servicing is affected so i do sell these policies off and on 1 or 2 in a month to get going. My fellow agent is right that these mal-practice originates from the branch itself Most of the LIC agents are not educated and don’t even know what is sensex they repeat what is told at the branch meetings and circulate what is given to them by the marketing officials. they don’t even understand the charge structure and no officer is willing to impart this knowledge they are more concerned with the business so can you blame the agents? but unfortunately we the agents are the face of LIC and if anything goes wrong the blame is on us. I wish that you circulate your news letter to more and more agents and educate them.

    1. Dilip

      Thanks for this information , we appreciate your views . I can understand that agents are most of the times at recieving end of humilation .

      Manish

  99. Thennarasu says:

    Your analysis must be healthy one,you are trying to defame L.I.C.they gain this reputation by service,honest settlement of claims.Why don’t you analyse the same type of guaranteed product offered by SBI,BAJAJ,ICICI etc.Their allocation charges in their previous ulip plans
    their returns today.Their claim settlement ration and their procedure etc.
    You may be hidden association with private insurance companies,have a healthy discussion
    here in future.

    1. Thennarasu

      I can understand you pain because you are Development officer at LIC . There is nothing against a company , its against misselling , that too misselling from agents . The same is true for other companies .

      Which company do you think we have association with ?

      Manish

  100. jitendra Solanki says:

    I think actuaries are the best guys to answer queries on ULIPs.But Rarely they speak.Here from Kotak Life answers to 100% equity allocation in ULIPs.He says its a myth.

    http://moneytoday.intoday.in/index.php?option=com_content&task=view&id=6073&issueid=80

    and i fully agree with him.

  101. mitesh says:

    @Hemant Beniwal….

    N what about mutual fund ? In mutual fund really investor earn or AMC ?

    pl reply.

    1. @ Mitesh

      I earlier wrote:
      “Manufacturers (Insurance or MF Cos) are just asset gatherers they will do what’s best for them. They earn their income from how much assets they have rather than how that asset performs.”

      AMC/mutual fund will get more money when they will show performance on existing funds, I still remember when I entered this Industry in 2002 no one was looking at Reliance Mutual Funds & Franklin Templeton was a bigger brand for MF Investors.

      But manufacturer’s earning depends on their asset size so every mutual fund was promoting their equity schemes & bringing new NFOs in 2007 even when market valuations were stretched.(Bcoz it was easy to gather money). In 2009 starting no one was bringing NFOs or advertises Schemes.

      So they are & they will play with investor psychology. Manufacturers will use greed & fear cycle for their benefit.:(

      Read Ashish’s Comment 🙂

      “In fact the manufacturer himself is involved in these activities. They are interested in selling their product only whether or not it is good for investor or not. They always catch Investor psychology and come with a product that can be easily sold to investor.
      2007-2008 (Jan to March) –
      Those days Equity markets were booming and people were interested in buying Equities. So ULIPs were hot products and easily acceptable.
      LIC comes up with ULIPs (Money Plus, Market Plus etc.)
      2009 (Jan to March) –
      Here the confidence of retail investor was totally shaken and they were not interested in Equity. Guarantee/Debt Fund was the Buzz word.
      LIC comes up with Jeevan Aastha – double your money in 8-1o years.
      2010(Jan to March) – ULIPs are good but what if market tanks once again.. so retail investor wants equity with guarantee.
      Now LIC comes with Wealth Plus- Highest NAV – though they never mentioned that they will invest in equities.
      IRDA knows all about such malpractices, but they don’t do anything. Insurance lobby is too strong and it’s a racket at large level to catch retail investor’s money.
      Complains won’t work, education will make the difference.
      Ashish”

      I read somewhere for equities “HELP PEOPLE – When peolpe are greedy & want to buy- SELL them and when they desperately want to sell – BUY from them”:)

  102. TMSrinivasan says:

    Dear sir

    Can you compare the Most proven Post office product ( say KVP/NSC) for the 8 years investment for the benefit of the non financial techies please…..

    1. TMSrinivasan

      I would do it sometime, for now , askyourself , what are the real returns , after factoring in tax on interest and inflation , what is the purchasing power of the returns .

      Manish

  103. “Do you know what the highest selling products in the wealth management market have been? ULIPS, for one, because distributors are earning as much as 50% of the premium in commissions, entirely upfront. ” Money Control

  104. mitesh says:

    Hi manish…

    I am sorry but y u rnot comment on my remaks ??

    I am waiting for ur reply

  105. Jitendra Solanki says:

    Well said in the discussion about misselling by agents.

    But what about JFM period.I beleive its the most pull factor for companies to launch new products and do agressive marketing which leads to lot of misselling.Unless The mindset of a customer on Tax saving in JFM (Jan,Feb & March) period is not changed agressive misseling will continue.Unless customer give sufficient time (Thought) to tunderstand the product mistakes will happen.Because of Tax saving that too in a hurry customer look at end figures without looking at product in details.

    If we look at the figures of highest inflows in Premiums, then its only JFM.LIC has collected 1800 crore till date in Wealth Plus.So maximum Kill happens during this period.
    Unless customer moves from JFM to J to M( jan to march), my personal opinion-misselling will continue.

    1. Jitendra

      I agree 100% . Investors have to be proactive in planning their finances and doing the tax planning from the start of the year itself and not leave it till the end of the year . the problem is that they feel its the last priority for them . Until that mind set changes , Misselling will continue , Any idea how can we change things ?

      Manish

  106. Manikaran says:

    The Article topic itself says the Review of LIC wealth plus and How Agents are misselling it. It is not saying LIC wealth plus in comparison to other companies. So the whole discussion is revolving around the LIC only, which is right at per the topic.
    Moreover the idea behind this topic is to make people aware about the basic product and help them not to be misguided from the company’s promotional activities.
    Though there are number of these kind of products launched in the market by different companies but i have not seen any other company to distribute such kind of mis leading Pamphlets…..
    As Jitendra Rightly pointed that this blog is only for awareness and not for /against any product.

    1. Manikaran

      Thanks , I agree with you , Also regarding no pamphlets from other companies , this is true , but still when agents come to give illustrations , sometimes agents show the returns more than 20-25% on the paper while explaining . Its not a pamphlet but on the rough piece of paper , it happened with me personally while an agent from MAX NEWYORK LIFE was explaining a ULIP to me .

      Manish

  107. Jitendra Solanki says:

    Dear All,

    I believ this blog is not targeted to any specific product of any company but highlights misselling due to agents and after effects of the same.

    Please take this blog in good spirit and have your view regarding the said topic rather than targeting the product.Also avoid giving view on continuing or discontinuin the products.This blog should be more towards awareness and not on specific product recommendations.

    1. Jitendra

      thanks for the support . I will also try to be more general while talking .

      manish

  108. raja sekhar says:

    The article you had written on WEALTH PLUS is only misleading the invesotors. If you give elaborate analysis compared with other products by private insurers and how LIC is misleading the advts. then it would be prudent on your part. Otherwise it will be mud swelling on LIC thru your blog. Do you know many pvt. insurers are not even disclosing the fund value of the policies taken by the customers and how they are misselling their products by maintaining only single fund ie., starting from the inception of their existance and comparing the returns as on today (in fact, they are alloting units at current rate ie above par and then how it will be benefit to the customer). Pl. give analysis keeping the following points in mind. I have a doubt whether you have gone thru the official brochure given be LIC wherein the returns were given @ 6% or 10% based on IRDA guidelines or you have gone thru the brochures prepared by someone else in the name of LIC. Pl.verify once and give your analysis.

    1. Raja Sekhar

      This is not an article for evaluation of returns , its just telling how in small cities agents are using pamphlets which are projecting higher returns . Its not evaluating the product per se .

      Manish

      1. Dear Manish/friends, let me jump in this debate from a different view. After opening of Life Ins. space for pvt. cos. ICICI Pru was one of the first mover. Also at that time it launched the first ULIP in India, named as Life Time. At that time (In nov. 2001) the pure Eq. fund was Maximiser & launch NAV was 10 Rs. Now sample the following DATA carefully.

        Maximiser launch NAV (10 Nov. 2001) = 10 Rs.
        HDFC Top 200 NAV (on same date) = 13 Rs.
        Maximiser’s NAV (12th March2010) = 62.71
        HDFC Top 200 NAV (12th March 2010) = 179.91

        For Maximiser the CAGR for 8.33Y period = 24.9%
        For HDFC Top 200, the CAGR for 8.22Y period = 37.5%

        Plz. note the above returns r only from point A to point B returns & in case of ULIP actual return for a policy holder ‘ll be less due to loss of Units on account of policy admin charges.

        Now based on the above data, anybody can make a choice.

        One interesting point in the above time frame of 8.33Y.
        From Nov. 2001 to april 2003 the market was down heavily (post Dot com bubble).
        From april 2003 to dec. 2007 the great bull run with some intermediate pauses.
        Year 2008 & till 9th march 2009, the steep crash
        From march 2009 to till date, the smart recovery

        From events point of view this 8.33Y time frame was enough to prove his/her worth for a fund manager. In indian context, 8+Y period is not a short term affair.

        In my view, when we compare ULIP funds with MFs for 10% return basis (Irda cap), in theory ULIP funds outsmart MFs over the long period of 10+ years but from the above data the practical learning is pointing something else.

        Thanks

        ashal

        1. Ashal

          Nice analysis and a crisp one showing how continuing investments in a good mutual fund can outperform other counterparts 🙂

          Manish

    2. Dear Raja

      The purpose of this article was never to throw mud on LIC, but to highlight how badly products of LIC are sold. You are taking about Official Brochure of LIC ; let me tell you dear, these pamphlets are available across all branches of LIC specially in the state of Rajasthan from where we belong. I am not sure about other states. Now, unless this is not supported by LIC officials, how can mass level distribution can take place. To add to the proof, there is this letter by MD of LIC in 2007. I am sure you have gone thru it. Now do you think that a retail investor logs on to the web site of LIC and verifies what Agent are showing. Be realistic. Obviously, officially no one would like to breach the law. It is all done just to misguide people. Now LIC’s agent tries to take advantage of 50 years of existing of LIC. I dont think so, LIC has done good to Indian Investors, else Indians y now would have understood Insurance at least.
      Talking of Private Insurance players, even agent there also sell policies in bad approach, who denies that.

      Ashish

  109. Rakesh Samar says:

    Listening to the great and health debate on HealthPlus started by Manish and now ofcourse going a step further by Puneet. Actually, the topic should have been Highest NAV Guarnateed products instead of just one product given by LIC.

    I was going through Puneet’s blog and the way he has tried selling the policy and He has done the same mistake as everyone else has done in explaining the product. Puneet, you have not tried explaining the investors as to how in your opinion can any company give a guarantee of this kind. People cannot think of such issues on your own, but I think that you can and IF YOU ARE AN ADVISOR (vis-a vis not a sellor), then it is your MORAL duty to tell them about the modus operandi. Your blog was totally silent in explaining the probable equity content of such a portfolio. People invest in such a product assuming that it is 100% equity and it is this myst that needs to be broken and told upfront. As rightly said, there is NO FREE LUNCH but it is the work of various agents of various companies who make the customers believe that there is a free lunch, not even free lunch but free dinner as well 🙂

    My advise here is donot mislead people and tell the prospective clients about these issues even if it is not asked for. Every agent would thank himself many times over. It is basically setting one’s expectation right. Manage the expectations of the clients well and even if you loose some business, the client will come back to you for good advise.

    Think about it, Puneet. And yes, sometimes maturity comes with age too.

    1. Puneet says:

      Dear Rakesh
      The blog was, in short, meant to solely mention certain features of LIC wealth plus and to clarify on a few doubts that people might have
      I have clearly given indications with examples of what the returns would have been in case the investments were made in stock markets at different times
      I have written in bold that investments are subject to market risks and returns are NOT guaranteed
      I have also written that illustrations are more important to learn about the charges and not returns because the 6% or 10% is merely an assumption
      I have even disclosed all the charges applicable in white and black

      Please log on to the site https://www.licindia.in/wealth_plus_feature.html and read all other details before investing. I NEVER asked anyone to buy it

      Anyways, FYI
      LIC Wealth Plus is a medium risk fund where the investments shall be made in equity, debt, government securities, money market, etc in any range from 0-100%

      PS: I guess, you did not get any point and you found this point that I did not mention the portfolio allocation. Grow up

      1. Rakesh Samar says:

        Puneet,

        You have missed the point in your effort towards protecting what you have written. The important fact as mentioned in FYI is not that easy for a layman to understand. If we as advisors will not state actual facts, then who will? BTW, I appreciate the blog and I have just stated one shortcoming that came to me mind. It is for you to appreciate constructive criticism, as I may call it or get angry over it. Your baby, you decide. And yes, maturity is a virtue and is earned with time.

        You also mentioned that you have written about returns not being guaranteed and the charges etc etc. Well , all those are already there is all brochures for everyone else to read. It is our job and duty to read between the lines, tell the real funda to people and help them in the decesion making process.

        Thanks for the suggestion on growing up. I would, now 🙂

  110. Arvind says:

    read your article on LIC’s wealth plus, many agents are mis selling this plan but do you have some knowledge about private life insurance agents, what they are doing?

    1. Arvind

      Misselling is not limited to just LIC , its happening all over the Insurance sector

      Manish

  111. krish says:

    Dear sir, great information. But to day all the insurance companies missselling the products through their corporate agent, banks, brokers. banks who has the insurance selling team started mis leading their clients that too senior citizens ( 60 +)who looks regular return like an Fd, these bank executives including branch manager sold ulip products. This is a dangerous situation. I think life insurance agents belongs to, LIC is for better than this banks, brokers, corporate agents. Last few years all the private sector life insurance companies agents expecially corporate agents , brokers sold their ulip products to the ordinary investors blindly by telling single investment by giving small percentage of payouts . The customer thought this is one time payment. But after 12 months the customers got a reminder that he should pay next instalment, the is shocking news for the customers. For this miselling who is responsible, whether insurance company or brokers? The employees of the corporate agents, banks and brokerage firm will leave the organisation after some time due to various reason and he will employee some where or no where. Hence he is not bother about the customer, there is no bonding with the customer. But the individual agents dont do like that, he want to add many custromer every day. The commission earning is important to him. Few may done misselling after some time these agents will vanish or they will be thrown away from the filed.

  112. mitesh says:

    How MF work ? n how they charge their charge to customer? at over a period really who earn MF customer or MF Company ?

  113. PRANJALI says:

    Hi Manish

    i had taken jeevan saral policy –39k/annum….3 yrs completed . want to stop it ?
    I know that i have to bear a loss . pls suggest any solution to minimise the loss.

    1. PRANJALI

      The only thing you can do is to stop it , surrendering it is a good choice , but you will not get first year premium considered in that , talk to your agent and see what agent says .

      Manish

      1. PRANJALI says:

        My agent suggest me the same but i don’t want to loss my money
        any other option . i m ready to wait ……….

        1. Pranjali

          Continuing it is like living with a hand with cancer . You dont want to cut it now because it will pain , but if you dont take that pain , it can be deadly later .

          Manish

  114. PRAJALI MAYEKAR says:

    Hi Manish

    i had taken jeevan saral policy –39k/annum….3 yrs completed . want to stop it ?
    I know that i have to bear a loss . pls suggest any solution to minimise the loss.

  115. mitesh says:

    Manish ,

    How MF work ? n how they charge their charge to customer? at over a period really who earn MF customer or MF company?

    1. Mitesh

      How MF work : https://www.jagoinvestor.com/2007/11/what-is-mutual-funds-easy-explaination.html

      Charges : The mutual funds have Fund management charges which are cut from NAV .

      Who gains : Company definately gains , your gains are dependent on the market performance .

      Manish

      1. mitesh says:

        Actuualyy what aprx charges charge by MF?

        it is like same in ulip fundmanagement charge ? because in ulip charges cut via unit but in MF unit remain same.

        1. @ Mitesh

          Entry Load Nil.

          Annual recurring expenses: The limit set by SEBI on annual recurring expenses, declines as the size of the fund increases. Equity funds are allowed to charge up to 2.5 per cent of the average assets as expenses for the first Rs.100 crore of investment. This falls to 2.25 per cent on the next Rs 300 crore of assets, 2 per cent on the next Rs 300 crore and to 1.75 per cent on any assets over Rs.700 crore.

          Funds investing in bonds(Debt) are allowed to charge 0.25 per cent less under each of the above slabs.

          Units are not diluted, expenses are taken out of NAV on a daily basis. So when you are seeing performance, it’s actual return after all expenses.

          There is no diffrence between return by fund & return to investor.

  116. Nilesh Read this article

  117. Rakesh pandit says:

    Hi see It

  118. Rakesh says:

    100% agree.. the roots run very deep but not limited to just LIC.. its with almost all Insurance companies.

    I was associated with 2 insurance companies but we all Sales Managers & Agents never got support to sell Term Insurance. All that we were asked to concentrate on Premium received, & High commission generating Policies.

    Its better to buy insurance from Banks than going through agents as agents are at mercy of the Higher authorities.

    1. Rakesh

      Oh . that was so faithful comment 🙂 . But how do banks help here if we buy Insurance from there . How do we buy term insurance or ULIP without any agent from Bank ?

      Am I missing some point here ?

      Manish

    2. @ Rakesh/Manish

      If agents are thieves bankers are dacoits. If agents are terrorist(financial distruction) bankers are Osama Bin Laden. 🙁

      Read Confessions of a mis-seller(Banker) from Money Today

      Extract
      “Finding potential customers was not a problem. We were encouraged to peek into the bank accounts of customers and target those with a fat balance. The higher the bank balance, the bigger the insurance policy offered. Close to 50% of the premium paid on these policies in the first year goes into the commissions. There could not be a better product to fleece your customers.
      Of course, not all forms of insurance were to be hawked with the same fervour. Customers were not to be told about term insurance, which gives a high life cover at a very low cost. Even if the customer was interested in term plans, we were asked to dissuade him and sell him a Ulip which brought in a fatter commission.”

      “I would target NRIs with huge bank balances and desperately looking to invest in India. Another easy target were IT professionals, especially those who had just returned from an overseas assignment. They were flush with money, their knowledge of financial instruments was poor and come February they were in a mad rush to save taxes. It is easy to trick them into the worst of insurance plans.
      Businessmen, especially property dealers, were sitting ducks when it came to selling Ulips. The very thought of taxfree income from stocks led them to pour money into these plans without batting an eyelid. Property dealers tend to treat all investments as real estate. The overriding concern is in how many years will the plan double their money. Tell them a time frame, show them supportive data, and they will believe anything you say. Try selling them term insurance plans and they think you are out to cheat them of their money.
      Then there are couples with young children. The branch manager told me to play on the parents’ emotions while pitching child plans. I don’t remember when I last sold a policy as a true insurance product.”

      http://moneytoday.intoday.in/index.php?option=com_content&task=view&id=776&issueid=81

      1. Rakesh says:

        Hi,

        You can compare various policies of all companies from policybazar.com

        For term insurance first calculate how much insurance your family will need. It is called HLV (Human Life Value in Insurance Terminology).

        Term Insurance policy will depend on your age.. Like if you are upto 30 yrs age then Metlife is the best bet. 31-35 years Max Newyork is competitive… Most companies gives life cover till Age 60yrs. Pls check for policies that cover you till age 65yrs.

        Suppose your pm income is 50k the you need minimum insurance of 1cr assuming bank fd interest rates @6%

        Most companies now takes customer’s acknowledgement on the illustrations of returns. As said by Hemat 6% & 10% according to IRDA guidelines. This is to safeguard customers Interest. (Most customers are not aware of this & agents forge customers sign on this documents).

        I would recommend a Term insurance as per your HLV & for returns purely go for Mutualfunds.

        Also keep check on your HLV to topup your Insurance cover.

        AMFI did a good job by waving entry load on investing in Mutual funds last year. The same will be enforced by IRDA by 2011 hope then misselling will be considerable reduced as Agents commission will depend on how much customers want to pay.

        1. Rakesh

          Thanks or your advice on detailed comment on term plan 🙂

          Manish

      2. Hemant

        Great .. thanks for the link . It really gives a good idea of how misselling happens in insiders word 🙂 . Wondering If I can publish the same story giving due credits to “Money Today” , Do you know ?

        manish

    1. Manikaran

      Thanks for the link , it is a worrysome story , We cant expect similar thing right now in India , but I wont be surprised happening this with Insurance agents some day when people really wake up 🙂

      manish

    2. @ Manikaran

      This is shocking.

      Dallas Financial Advisors Shot in Their Office

      “Richard and Chris Smith, father-and-son financial advisors in Dallas, were shot and wounded yesterday by Robert Mustard, who may have been a client, according to television news reports. Mustard is now in police custody.

      According to police reports, Mustard, 60, a disbarred attorney, knew the victims and may have been a client. The Smiths’ family said that Mustard walked into the office, said, “you’ve taken all my money,” and started shooting. 🙁

      The Smith Financial Group is located in north Dallas. Both father and son survived the shooting.”

  119. Manikaran says:

    Manish/Hemant /Ashish, Great article.
    Last year when i got the pamphlet of LIC MOney /Future Plus, i scanned and reported the same to IRDA but no action was taken n that. and As we all can very well c and you all have rightly pointed out that this time again Wealth plus is being promoted with the same style. But the overall discussion on this remains limited to few no. of people who are net savvy. Actual Selling of these kind of products are happening at Small towns where people have high rust on LIC and thus Agnts take benefit out of it. I know one LIC agent who’s collected Rs 1 crore of Premium in a small town of Punjab. Some of my sources are telling me that On Rs 70 lakh collection of Premium LIC has anounced some international trip for advisor.
    My overall concern is that sitting in our offices, we are discussing and writing blogs but try to generate some ideas and also put them into action as to how can we stop ths kind of Misselling and make people aware about all these things. You will definitely get the support of many peopl like Me for this noble cause.
    Blogging has very less reach

    1. Manikaran

      You are 100% correct , blogs reach a small percentage of people and we should do something to reach a larger section especially in small towns . What we can do is have this story printed in HINDI and publish it in Local newspapers .

      All , does anyone have contacts in local newspapers and can help to publish this story in local newspaper , any language is fine ?

      manish

      1. @ Manish

        Which newspaper will kill there ad. revenue & publish this??

        Have you seen movie Rann(Amitabh) based on media.

      2. Rakesh Samar says:

        Regarding publishing this story in local languages, I do have links in Rajasthan Patrika, the leading daily of Rajasthan and having 25 odd editions all over India and could try it. Not sure though, wherther they will publish it or not and instead of focusing of just LIC Wealth plus, it should target all those companies that guarantee Highest NAV.

        For a complete story, maybe I will have to pick and use various stuff from comments of various people. Tell me, what should I do about credits? I will have to use the material from here and elsewhere to make a complete story.

        By the way, has somebody sent the story in any English newspapers and magazines? Why not?

        1. Rakesh

          Please take the lead and gather data from here and other websites . You can mention the websites you take data from . We have not sent the articles to english newspapers , no contacts !! can you help ?

          Manish

  120. shirish dole says:

    hemant & manish ji,i have found u a marvellous supporter for me as i am working in rural area i never asked any of my customer to buy nav products specially lic ,i am always trying to literate people about investment,specially life insurance,really u have opened my eyes and with help of u i will work hard to literate people,even though i wish to start my own financial advisory work.

    shirish

    1. Shirish

      Thanks for your comment , which Rural area are you in ? We would like your help to get this article published in local newspaper incase you can do that ? mail me at manish@jagoinvestor.com

      manish

  121. Rakesh Samar says:

    I am a pucca proponet of Term plans and have probably advised and sold max in my region (Udaipur). Regarding iterm plan from Aegon-religare, problem is that it does not offer this plan to people from smaller cities 🙁

    Birla also offers low and special rates on high sum assured as well.

    1. Rakesh

      Bravo !! .. Kudos to you for your work .

      I am sure in future iTerm will increase its reach to other cities in some way . For now sell other normal term policies .

      Manish

  122. Rakesh Samar says:

    Quite an effort made by Manish in following up with his replies. My views:

    LIC Tarang and TATA AIG Mahalife Gold: I read your views against jeevan tarang and agree that the returns are close to 5%. Even Mahalife gold is similar on returns, maybe slightly better if you see the upside of bonus that one gets everyyear.

    I consider Mahalife gold as a part of asset allocation tool: all money cannot be put in equities. Some can be in fixed income groups and guaranteed income product. What do expect the FD rates in say year 2025? I see them in the range of 2-3% as is in the case of developed countries now. It is then that the benefit of such 100 year (basically long term) plan might make sense. It is then like a retirement/annuity plan where the returns are pre determined unlike the annuity products that one may purchase after 25 years. What returns would you expect in an annuity after 25 years; a measly 2-4% maybe.

    Mahalife gold can be an excellent retirement tool wherein the retirement corpus is fixed today, the annuity is fixed today, the flexible portion of bonus is extra that might come or not come, the annuity is tax free, the annuity is guaranteed at a fixed rate. After having said that, Mahalife gold comes only after one has invested as per asset allocation of (Equity=100-age) thumb rule.

    I find it good for daughters: father take a policy on her daughter and the policy promises to pay a fixed amount on her birthday every year untill she lives. parents may long be dead but she would keep on reeciving an annual pocketmoney and will remember them. The reason why I singled out daughters is that normally sons inherits most of the property in normal hindu family and the daughter gets whatever she has to get at the time of marriage. I know, I know, this does not apply to many families but still there are many such families where such rules indeed apply.

    1. Rakesh

      Nice thoughts 🙂

      Inflation and Interest rates go hand in hand , the reason why interest rates my go down to 2-4% range is because inflation will also go down to that level ,else interest rates will also not !! . So its not a worry that interest rates will go that much down , the real worry is , will interest rates will go down and inflation will still be up , that will be a messy situation then 🙂

      Regarding the Mahalife policy , i have no much idea right now :). looks good from what you mentioned here 🙂 .

      keep it up .

      1. anonymous says:

        @Samar
        If you think interest rate in 2025 will be 2-3%, why don’t you buy Govt Bond 20 yr @8 % taxable … 2025 is 15 years way, keep buying the bond every year Say till 2015 …. So for till 2035 you have fix return of 8% ….
        Question again is why to go for 5% return policy …

        1. Rakesh Samar says:

          Point well taken, a valid point. It is not at all easy as of date now for retail investors to purchase G-sec directly. Somebody here wrote about opening up an account with IDBI Gilts from where one could purchase G-sec, but am not sure as to how that works and whether smaller cities guys can do that. Anyone here who has opened account with IDBI Gilts or likewise and hols G-sec personally?

          Mahalife is a plan with 100 years life (90 years post contribution) and an intrest rate of 4.5% to 5% taxfree for that duration is nothing to sneeze at. Ok, It may not be that great either but for those people (like most of us) who are not very active traders of fixed income securities, this plan or similar could be one of the solutions. Better are ofcourse available, all I am saying is that it is also not bad looking at one asset allocation and after having exhausted one’s equity appetetite.

      2. Rakesh Samar says:

        I am obviously referring to the time when Indian economy would be nearer to the current developed economies and inflation would also be down to 2-3% level. Inflation and interest rates should tango with each other (I am not much of an economist here, so brickbats with caution only 🙂 ), else the scene when inflation is 8% and intrest rates is 3% would play havoc.

        A guartaneed taxfree return of 4.5-5% could be nothing great from someone’s point of view but then it nothing to sneeze about as well. Lets try finding out available products that match this with a horizon of 90 years post contribution. My excel sheet calculation assuming a conservtive apporach on additional bonuses, gives a IRR of 5.5%-5.75% for a span of 90 years.

        I am sure that very very few products are offering something of this kind. Pl let me know of such or better products. Anyone here? Lets scourge.

        By the way, I am interested in exploring options of purchasing G-sec directly. Help required.

      3. Vandana says:

        Dear Manish,
        Your blog is a mine of information and education for a person like me who had relied blindly on my father for all financial matters and today when I have to play this game on my own, the more I understand it, the more I realise how complex it is and how everyone is out to fool you!!
        I will be very very grateful if you can analyse Tata Mahalife gold in detail for me as I like to play safe and need a small chunk of my savings in a plan which will fetch me monthly tax free income.
        Please do analyse TataMahalife gold and also advise what you think is the best in terms of safe investment.
        Thank you so much!!
        Also can one meet you in person for financial planning? Do let me know your contact details.

  123. merlin says:

    many thanks – appreciate ur honest opinions , this is a huge help to us poor financially unsound souls . 🙂 keep up the good work – god bless

    1. Merlin

      You can read more articles at https://www.jagoinvestor.com/archives . Keep commenting and involve in discussions 🙂

      manish

  124. merlin says:

    Thanks for such detailed information , i was as good as an lic baby , investing sorry wasting all of my money……..please advise on my investments —- what should i do.

    10 lakh policy Jevan anand premium 50k pa……….. commencd in 2004 maturity is in 2029.
    jevan shree 25271 yearly — 26 yr plan and 16 yr premium. commenced in 2002
    bimagold – 7106 quarterly for 16 yrs commenced 2008
    profit plus -4500 qrtly to be paid for 4 years 16 yr plan commenced 2008

  125. Jana says:

    You can check claim settlement insurance company wise in irda website.

    Page 151

    -Jana

    1. Jana

      thanks for the link . Better you reply to the person who asked for it . When you reply , better click on “Reply” Button for the user comment and then put your comment , it helps to have threaded comment .

      Manish

  126. Venkatesh says:

    Hi Manish,
    Thank you for the most enlightening and simple articles on shares, MF and insurance. Apart from Jeevan Tarang. I have also taken two other policies: New Bima Gold (T.No.179) and Jeevan Saathi (T.No.89). How do you rate these policies? I am paying a total of Rs.60,000 p.a. I have taken the above in 2006 and thinking of surrendering them.

    1. Venkatesh

      As you know , All the endowment policies are a strict no no .. better to surrender them

      Manish

  127. punit says:

    hi sir i read ur all ur articles and i say we r being saved by ur articles thanks . sir i want to as k for dsr insurance their site is http://www.dsrinsurance.net should i join it or not as they show stars in their hands kindly suggest thanks

    1. Punit

      thanks , dont go for this dsrinsurance, who are they ?

      manish

  128. mitesh says:

    Hi Manish

    Here i think all things is on Trust only. thats the advantage is taken by LIC.

    Because U will get so many people have LIC pol for More then 10 yrs, 15 yr, 20yrs.
    but have u seen any body(so many but compare with LIC custmer) who invest in MF as above period.

    If someon like to plan for retirment at age 30, have 30 yrs to invest money. can person trust pvt com or MF for that long period.
    (Any suggestion for more then 20 to 30 yrs on investment)
    Example : Satyam Computer.
    so many investor or trader be freezee by investing. what done by Sebi ? Gov ? Nothing …paise to gaye bhaiiii …..

    1. The reason we dont find many people for long tenure in MF is because there is no trap factor and its a great thing , LIC policies or any other endowment policies have a trap factor , the way they are designed makes no sense to me . Imagine this , you pay 1 lacs per year for 3 yrs and now you want to stop it , you get back just 90k or 1 lac as surrender value , just because you dont want to take the loss , you keep on investing in those policies some how , compromising with your other financial dreams, you take loan , borrow from family etc to pay your endowment plans .

      Atleast in MF you never have this issue , you are free to change things and have that flexibility , the reason you have mentioned of “there are people who have LIC policies from 10 yrs , 15 yrs” is more because of helplessness and ignorance of logic and mathematics , rather than joy !! .

      “can person trust pvt com or MF for 30 yrs period.” . the answer is no ! you have to keep evaluating things atleast on yearly level and have your money diversified enough so that things like “Satyam computers” dont affect you badly .

      manish

  129. vivek says:

    hey manish
    its realy a nice post.
    well done.

    1. Vivek

      I am glad you liked the post . please share the post with as many as friends and LIC hard fans as you can 🙂

      manish

  130. vivek says:

    hi manish
    There is a new ULIP policies in the market, which they claim is the lowest cost ULIP, it is ICICI Pru ACE. It has no premium allocation chargesduring the entire term of the plan. but there are three charges altogether in this policy.
    1) policy administration charges-Rs. 60/-per month through out the term of the plan.
    2) fund management charges of 1.35% in all equity oriented funds.
    3) mortality charges.

    can you review this policy also.
    i think icici ACE is worth taking it. wat do u think

    1. Vivek

      yea .. havent looked in detail , but it looked ok compared to others , however ULIP is still is ULIP , you cant buy a “lesser evil ULIP” because its a “lesser evil” 🙂

      You have to understand if you would like to buy a ULIP overall .

      What do you say ?

      Manish

      1. Srinivas says:

        Yes. ULIP is a ULIP.
        But today, I read in economic times. ULIP is better than MF for long term (10+ years).

        Read more: http://economictimes.indiatimes.com/quickiearticleshow/5661180.cms
        I am yet to dig out more about ULIP charges

        Any comments on this

        1. Debashish says:

          Just Read the article –
          It just says MFs are better for less then 10 yrs and ULIPs are better for more then 10 yrs . They have not given any data to prove that .
          I believe tough on Long Run ( after 5-7 yrs ULIP charges become comparable to MFs ) the high charges of starting years will take its toll and reduce the return .

        2. Srinivas

          Some points go in favour of ULIP , I accept , but the article actually talks about the cost part , its says the cost of MF is more than ULIP in a long term like 10 or 15 yrs , which I dont agree fully . may be they are assuming the agents commission here , which we can avoid by direct investing , assuming the premium allocation charges + FMC charges of ULIP compared to just FMC charges on MF , it would almost be same in longer run .

          Dont forget that most of the people who are talking about in these articles are big guys are from all these companies which sell ulips . see

          “But if an investor is looking at a 10-year horizon, I recommend pure equity-oriented ULIPS,” says Pranav Mishra, senior vice-president & head — Products, ICICI Prudential Life Insurance.

          If i use ULIP’s compared to MF , I can beat MF by huge margins I would say , from usebility point , ULIP can beat MF , but what is the guarantee of good usage from customers , most of the people just buy ulips and want it to grow on their own , I dont think it will work

          Apart from returns , we also have to look at easyness , liquidity etc .

          What are your personal views ?

          anyone else ?

          manish

          1. Srinivas says:

            Budget 2010 has put few charges out of service tax circle, this could work out for the investor and increase the IRR.
            ULIP can work out better for a intelligent investor who track market, take decision when to switch and for a long term.
            Just investing every year and forgetting does not reap well.

            1. Srinivas

              Yup .. Agreed !!

              manish

  131. h s kharbanda says:

    Dear Sir,
    Wt are your views on Guaranteed Nav ins plans,as you have mentioned only about lic wealth plus,which is very late to enter this product while other co’s are already selling this product.So what are ur overall views on such plans from all co’s.

    And I would also like to know if there are any good plans available with lic or other co’s beside Ulips.

    1. h s kharbanda

      Highest NAV plans have no advantage over the normal ULIP’s . We will see soon on this . wait for it .

      Manish

  132. Sunil Date says:

    The current problem with the highest NAV guaranteed plan is that either the customer sees / or the agent shows a graph of market going up to 21000 and then falling to 8000 and his NAV being locked at 21000. What the customer is ignorant about is that the fund manager will never let the NAV to go up beyond debt returns. What the customer is also not aware of is the allocation and mortality charge. He only thinks that his full investment will be locked at 21000.

    One of my friends was also approached by a Pvt co insurance agent and was promised 18% return w/o the money being invested in stock market. On inquiring which are the debt instruments with such high returns, he mentioned that they are old govt bonds . On being asked whether his company can give it in writing, he showed a photocopy of a letter written by the company allegedly to a customer guaranteeing the return. When asked for a copy he says that since it is addressed to some other person he cannot give a copy and further asks would you like a letter written to you by the company being circulated publicly ?. The client starts believing such smart & confidant replies and also starts appreciating the agents ethical (?) dealing.

    Jai ho Bhaarat

    1. Sunil

      I remember that there was some kind of rule coming in from IRDA , that when a person buys a policy , he also signs a document which says that he has understood all the things and mentions some points on this . Will it be effective.

      I am sure agents will also sign it themselves like they do for the form , we are too lazy to even do that .

      Some times I feel that IRDA should have a rule that the selling process should be video taped and has to be publicly available somewhere .. will this weird idea change things 🙂

      Manish

  133. Shilpi says:

    Guys,

    Any body and everybody can become an insurance agent! they only need to explore their contacts and bring high premium policies for the company. This company can be a public one or pvt… all are same.
    An agent in these companies are given unrealistic targets to achieve. To continue their employment, they indulge into so called miss selling. Such practices are observed in most of the financial products like share broking, mutual funds etc.
    Investors must understand one thing…an agent is working for its company and not for them. He has the contract of agency with the company and not with the investor. It is not their job to educate the customer on various products. Their prime responsibility is to boost sales and give after sales service. It is investors’s job to educate themselves or hire professionals for this specialized job.
    This is high time for investors to be ready for Fee based consultancy. When a person signs a contract with you then only he/ she is liable to secure your interest.
    Remember there are no free lunches in the world! 🙂

    shilpi

    1. Shilpi

      I am in agreement with you on all the things , what you have talked about is what we have and how the current structure of the system is , but thats not how it should be in real world or ideal world .

      Things are not in right direction in India , Agents are just like compounders or just a person who should assist in selling the products , not advice on them , thats how it has to be , but in our country Agents are the one who advice on things like they understand everything , this has to change and will take time .

      Regarding unrealistic targets given to agents , I can understand that this is a strong reason for misselling and many good guys have to do it because they have to run their families , pay their child fees on time and run the home , so at the top level the whole systems has to be blamed .

      What do you suggest as a responsible financial planner in our country . what are your ideas to change things ?

      Manish

      1. Shilpi says:

        Manish,

        You gave the answer…let chemists be chemists and doctors be doctors!

        Why try doing all the jobs!
        Further some Government regulation is needed to identify and recognize the Financial Planners/ Consultants job.
        While going through all the discussion I realized one thing very strongly that Investor education is important! The various discussions on topics like NAVs, Ulip Vs MFs, fund management charges etc. apply only when an investor is able to identify the strategy which suits his/ her personal, professional and health profile.

        Please don’t Follow the Fashion blindly…the results can ruin you!
        Its Ok to discuss with experts and decide…they may actually show you the dark sides.

        shilpi

        1. Shilpi

          Yep .. financial planning is of utmost importance . thats the primary thing , almost everyone jumps to questions like “which is the best policy” or “which is the best mutual funds with best return”, but they do not ask the primary question of what are their goals , what time frame are they looking for , what is their risk appetite etc ? These are the primary level questions they have to answer first , rest of all ahead is secondary and have less importance in over all stuff .

          Manish

  134. Chirag Dangarwala says:

    Furhter as you highlighting about mis-selling by LIC Agnet, Please tell me about approach made by the advisor of varioud insurance industry and mutual fund advisor ? becauseof targate base selling. Advisor of various insurance industry are come to you and explained the policy and give you very high comittement about products, about services, about helping hand whenever necessory. Is any one is here telling me whether they fullfill ment their comittment? Explain the policy is different and recevied the policy document is different and when you followup for same advisor of various inusrance co. are comming to meet you after the cooling period is expire? it means that you are losing you money. Is any body study the formula adopted by various mutual fund co. in deeply for declring NAV? Is any company is show you that they invested in this co. at what rate of returned ? Where the fund is used by invested company ? MUTUAL FUND is hopeless planning means misguiding planning come and invest in PPF, NSC, KVP etc. or RBI Relief Bond or in insurance only/

    1. Chirag

      All insurance agents missell in similar fashion , there is no much difference , just that agents from SBI and LIC have an advantage over the trust part .

      See : https://www.jagoinvestor.com/2010/01/top-10-tricks-used-by-agents-for-misselling-financial-products-and-how-to-deal-with-it.html
      I am really not understanding what you want to ask here on this comment , better break down the questions in parts like 1) , 2) like this .

      Manish

  135. Praveen says:

    3 years back my cousin & their friend’s who are in their final sem of MBA(then) were (as a part of final sem project) recruited as agents (part time) by an private insurance company. They told that when they visited customers they tried explain them all the intricacies of ULIP’s with around 10%-15% of returns for long term but then no body bought the policies from them. Then they changed the tactic and started giving illustrations with 30%-40% returns. Then they sold many policies within a short time. Here the agents are forced to missell (I think this is not apt word) as no body is buying them if they say right figures.

    They done this as they didn’t want to continue in that domain for long time & just they want to submit their final sem project but what they can do if the customer didn’t listen to them. They realized that if not with them, the customer will invest (the customer wants to buy some ulip) from another company’s agent who will show the same false figures.

    1. Praveen

      Problems is from both sides , I agree that customers are also to blame in this whole thing , as we have raised out expections to such high unrealistic levels that we dont want to get great returns like 15-20% . we want 40-50% , somewhere the last bull run of 2003-2007 has contributed to all this .

      What do you think investors should target the returns at ?

      Manish

  136. Chirag Dangarwala says:

    Dear Manish

    Your articles on LIC’s Wealth Plus is good one and please note that plan you mentioned is not a Bima Gold it is Bima Plus Policy and further note that you mentioned that this possiblity when the market sensex on around 30000 pts. but tell me when the market is gone at 30000 pts in Indian Stock Market History I never seen this height of Indian Stock Market, further note that the return shown by LIC’s Agent is depend up on after ther market goes down 8000 pts during 2008 and after that market gone up steady and not much more flucuate. In wealth plus plan retrun are shown on the basis of LIC’s Bima Plus Balanced Fund basis as confirmed by my LIC Agent. I don’t think that this is wrong. Further sorry to say you that your approach is to misguide reader of Jago Investor because of you highlighting on MUTUAL FUND but on checking of MUTUAL FUND history last last 02 years after falling of Share Market, no MUTUAL FUND perform very well even the FUND MANAGER of MUTUAL FUND HOUSE are hesitate to invest money during donwside period as confirmed by one of the leading MUTUAL FUND HOUSE manager who is also a advisor of LIFE INSURANCE BUSINESS. Also note that no.of insurance advisor of various insurance company also advisor of LIC of India because they are also not trust on their Insurance Company. e.g. my insurance advisor is advisor of MAX NEW YORK LIFE also advisor of LIC of India. Why because they told that at presently now the insurance market senario is that you have to take agency for LIC of India also because if party is not convienced for PVT. Insurance Co. immediately ready for taking a policy of LIC of India. Further as your more focusing on MUTUAL FUND please give my advise which MUTUAL FUND gives a gurantee for the amount you invested when the market is downside. Please note that I have invested Rs.10000.00 in Canara Bank’s Mutual Fund and Rs.25000.00 in HDFC Mutual fund in the year 1996 what i will get return just Rs.31587.00 in the year 2001. Why you prefer MUTUAL FUND i don’t know. From my view point PPF, NSC, KVP are best for Investment purpose and LIC is best of Insurance and moderate return. MUTUAL FUND is very bed for INVESTMENT PURPOSE. Further note that CFP are means very CRUSIAL FINANCIAL PLANNER they guide you and create very doubt for your planning what ever you done. Sorry for very adverse writting about MUTUAL FUND.

    Chirag Dangarwala

    1. Chirag

      There are some confusions here .

      1. The sensex levels mentioned in article is not 30,000 , its 3,000 .
      2. misselling is happening not just in Insurance but also in Mutual funds , but its a differnet kind of misselling . Mutual funds will not give your good returns if you just invest and forget , you have to use portfolio rebalancing , diversification and other regular investing . Mutual funds or for that matter any Equity producst (even ULIPs) are for long term , you should not expect a good return with high probability in short term .

      For your example of investment in 1996 to 2001 and a small return , the answer is that period was bad as markets didnt go anywhere , but then 5 yrs is not always the best time to get return , Did you invest through SIP

      Are you talking about CFP’s when you talk about “Financial Planners” ? What was your experience ?

      Manish

    2. @ Chirag

      Thank god you said “your agent” but you are sounding like pure Insurance Agent.

      Read D Swaroop(PFRDA Chairman) committee’s consultation paper on investor awareness & protection, which may open your eyes.

      http://www.slideshare.net/tflindia/committee-on-investor-awareness-protectionreport-2009

      1. Hemant

        this was a great link , I had glanced through it and will read it in detail sometime 🙂 , thanks for the link 🙂

        Manish

  137. Puneet says:

    Dear all

    I would suggest you to kindly have a look at http://puneet3210.blogspot.com/2010/03/lic-wealth-plus-know-truth.html where I have tried to give you appropriate information about LIC Wealth

    Please also note that I have been one of the best debator in my life but off late, I have stopped debating and blaming. I have cultivated the habit of discussing and solving and finding better options for a better life. So, I welcome a healthy discussion on anything relating to this plan or in general relating to LIC

    Regards
    Puneet

    1. Puneet

      Thanks for the link . We actually discussing more about misselling and how agents through out india are trying to missell the products (any kind of products from insurance companies , not just LIC) . We dont disagree that there are good agents , I know many agents who are doing great work . We are talking about a section of agents here and not in particular which is very obvious .

      What do others think about it ?

      Manish

      1. Puneet says:

        Dear Manish

        We all have this habit of hiding behind the bush when we do mistake. We don’t like taking the blame and say that, it was my mistake

        If I show you a normal Reynolds pen and say that, it will soon cost Rs 1000, will you buy? Why not? If I show you a land (30*40) in a small town and say that it will give you returns of 10000%, will you buy? Why not?

        The answer is that these are IFs and BUTs. Same way, a market is a place where buyers and sellers trade. The common price at which there is a agreement between them to buy/sell is the market price. So, we can never say what these prices can be sometime from now

        What I would suggest to people is to see and compare. Take the brochures of all similar ULIPs in the market. And compare them. Check out every minute detail and go for the best based on features, services, etc offered and as far as the returns are concerned, let me stress again that no market-linked plans (be it ULIPs, MFs, shares or anything) guarantee you anything called as returns

        As disclosed, the premium allocation charges of LIC Wealth Plus is the lowest (12% for 1st year & 2.5% for 2nd & 3rd year). You do not have any charges to pay on surrender after 3 years. You do not have any charges to be paid for partial withdrawal either

        Many more details are updated on the website of LIC (as well as my blog)

        Have a look and make a right decision

        After all, its your money. ACT RESPONSIBLY FOR IT. (You can always blame the agent or the company or the world or anything BUT money will not come back. SO, TAKE YOUR OWN DECISION AND STICK TO IT. Do NOT be the bush hider)

        Regards
        Puneet

        1. Puneet

          I am with you on “ACT RESPONSIBLY FOR IT. (You can always blame the agent or the company or the world or anything BUT money will not come back. SO, TAKE YOUR OWN DECISION AND STICK TO IT”

          this is the problem with your country , we do not like to research on any product and go with what an agent tells us , see the examples given by other readers on this same article . We are not talking about just one policy here by LIC , we are talking about any insurance product even by other private life insurance companies and they are even more aggressive in misselling . The point is not “how is LIC Wealth Plus” , try to shift away from that topic and lets discuss things in general . We are now discussing about Insurance misselling and how companies in India (Not limited to LIC) are not very much interested in customer benefit and more interested in target achieving ..

          I am sure you having practical experience see more things than us . You are a better person to tell us . So please tell us

          – What are your views about Misselling in India , is it happening or not ?
          – What do you think about LIC policies in long run , its known fact that LIC policies (endowment policies , all starting with Jeevan word) generate close to 6-7% return in long run , Is it fine to invest in them for long run , People like PV Subramanyam who are one of the best in Industry advocate that these are junk plans and its not suited now day when we have better products , even Monika Halan who is one of the finest financial planners in the countries freaks out when endowment plans are mentioned ) .

          – What do you feel about the allegations put by Mr Subhendu and other readers on LIC agents ? Would love you hear why they are wrong according to you .

          Waiting for your comments , as it would add a better perspective on discussion .

          Note : lets not talk about Wealth Plus only , we have to talk on a bigger topic , I understand that Wealth Plus is very difference from other ULIP’s and may be one of the best in the category . I saw your blog 🙂 . good one .

          Srinivas/Hemant/Rishabh>Ashish/Others would love to hear comments from you all .

          Manish

          1. @ Manish

            You have noticed JEEVAN for Endowment but missed PLUS for all ULIPs.

            BIMA PLUS
            FUTURE PLUS
            JEEVAN PLUS (Combo Jeevan + Plus)
            MARKET PLUS
            MONEY PLUS
            FORTUNE PLUS
            PROFIT PLUS
            GRATUITY PLUS
            HEALTH PLUS
            MONEY PLUS – I
            MARKET PLUS-I
            CHILD FORTUNE PLUS
            HEALTH PROTECTION PLUS
            JEEVAN SAATHI PLUS

            And Now WEALTH PLUS.

            How many minuses are hiding under these PLUS.

            1. Hemant

              I never noticed this Plus thing , Time to redifine maths , first minus and minus were PLUS , now so many PLUS will become MINUS 🙂

              Manish

            2. rishabh parakh says:

              good one manish ——— ====== ++++++

            3. Puneet says:

              Hi

              Of course, nothing to hide, I am very busy with huge sales of LIC Wealth Plus
              Allegations have always been there. The more they come, the better. It helps us a lot in understanding things. One sad point, when people are not able to reach heights, they start pulling others down 🙂
              A quick attempt to write my views now
              1. Agreed that agents mis-sell (for whatever reason, be it for commission, ignorance, misunderstanding, etc, etc). So, what next? Why don’t you write to IRDA and cancel their licenses??? I know you won’t. Coz, if you do that, your blog will have NO visitors and how will google pay you??? Sad… Nothing personal. Its the common story with all such sites. Criticize and condemn to get traffic
              2. Agreed that agents sell endowment plans. You have problem with that because returns are less. The people are happy at these returns. An approximate figure is given to them and they are FOR it. And the figures indicated here are not blown up. They are given considering the past returns and are in range of 5-6% only. I am still speaking of endowment plans only
              3. Come to ULIPs. I repeat my point again. If someone tells you returns of 6%, you are sad. If someone tells you 10%, you are not convinced (as markets are growing at 17% from 1990 and all that stuff). And if someone assumes more than 10%, you have already started crying, IRDA, IRDA… What a fun man… What exactly do you want? Traffic for google adsense… You got it… Smart man. Please don’t take it personally. Its the common story of all sites
              4. Come to term insurance. Who wants to buy? I dont know why people themselves do not have a taste for it. When I meet a person who is from lower-middle class, he does not like a plan where there are no returns. When I meet a middle-upper class, he says he wants ULIPs only and he is ready to risk. Of course, there are people who ask for term insurance and I get that done too. And again, after getting that done, he says, he did a mistake
              5. Come to plus minus thing. Thats a foolish comment. Visit https://www.licindia.in/plan_navs.htm and see the NAVs and calculate the returns for yourself. Amidst bad market conditions in past 2 years, people who have invested in LIC Money Plus are in PROFIT (though its very nominal). What say??? And other plans, they are far ahead with higher NAVs. Bima Plus around 50, Jeevan Plus & Future Plus around 20. Market Plus around 15. Its only those plans which came in 2007 and the market corrected from 22000 to 8000 (and now back to 17000) that have just broken even (after all charges). Their NAV are in range of 11-12 (Money Plus, Fortune Plus, Profit Plus). Further, those plans which came in 2008 (Money Plus-I, Market Plus-I, Child fortune plus) are already in range of 14-15
              OPEN YOUR EYES Mr. MANISH. Stop looking google analytics and adsense. Start looking TRUTH. Dont take it personally. Its the story with all such sites
              6. Last point of mutual funds. My investment of Rs 50000 in Reliance Tax Plan in 2007 is worth Rs 48000 today. And MFs do not have any charges right. Guess what if they charged something like 26% allocation charges??? My investment of Rs 20000 in ICICI Pru Tax Plan in 2007 is worth Rs 19000 today. What say??? Check the NAVs and speak the TRUTH
              7. Another reminder to everyone. There is NOTHING called guaranteed in market linked investments. Everything depends on markets only. Investments in 2008 are in more profits than in 2007. Investments in 2001 are in more profits than in 2000. All this evidences that INVESTMENTS ARE SUBJECT TO MARKET RISK. Its boldly written everywhere. And now you will say that people are not aware. All people on the internet at least are enough knowledgeable to be aware of this. If you really want to enlighten and empower people, go in the villages and places where people do not have this knowledge and conduct some investor education camps. I will come with you. Mark my words. I will come with you and tell these points openly and lets fire those agents who are guilty. But, I know you won’t. Why will you think of improving India? You are concerned about google adsense and getting site traffic. Dont take it personally. I am telling the general story of such sites

              Its always better to think reaching high rather than trying to bring others down. I had this habit of debating but now, I only discuss and clarify

              PS: By any change, are you an agent for Aegon Religare and lost your license for meeting targets 🙂 … Kidding

              Puneet @ http://puneet3210.blogspot.com

            4. Dear Puneet,

              Since you had given in points, i thought i should reply point by point.

              Puneet Says:
              Of course, nothing to hide, I am very busy with huge sales of LIC Wealth Plus
              Allegations have always been there. The more they come, the better. It helps us a lot in understanding things. One sad point, when people are not able to reach heights, they start pulling others down 🙂

              My reply:
              “ARROGANCE IS THE SEED OF DISASTOR. THE VERY FACT THAT LIC AGENTS HAVE GOT INTO ARROGANCE IS WHAT I COULD SMELL. EAST INDIA COMPANY LOST ITS GROUND AS THEY THOUGHT INDIANS CANT FIGHT. HISTORY TELLS US, THAT AT THE END, THE TRUTH SURVIVES AND NOTHING ELSE.”

              Puneet Says:
              A quick attempt to write my views now
              1. Agreed that agents mis-sell (for whatever reason, be it for commission, ignorance, misunderstanding, etc, etc). So, what next? Why don’t you write to IRDA and cancel their licenses??? I know you won’t. Coz, if you do that, your blog will have NO visitors and how will google pay you??? Sad… Nothing personal. Its the common story with all such sites. Criticize and condemn to get traffic

              My reply:
              “LETS UNDERSTAND THIS POINT VERY WELL. ALL OF US ARE HERE TO MAKE MONEY TO FULFILL OUR DREAMS. SOMEONE MAKES MONEY BY CHEATING OTHERS AND FEW MAKE MONEY BY GUIDING OTHERS. I CAN’T FEED SOMEONE IF I MYSELF VERY HUNGRY. BUT AT LEAST, I DON’T EAT BY SNACTHING SOMEONE’s HARD EARNED MONEY. AT LEAST, ITS GOOD THAT YOU AGREE THAT THERE IS MIS-SELLING AND YOU ARE PART OF IT.

              IT IS NOT THAT WE CANNOT GO TO IRDA AND COMPLAIN ABOUT IT, BUT THE VERY FACT IS THAT THIS INSURANCE IS NOW A INSTITUTIONAL FRAUD AND WE NEED HUGE FORCE TO FIGHT IT OUT. BLOG IS A MEDIUM BY WHICH WE ALL ARE ABLE TO UNITE ACH OTHER THOUGH I HAVE NOT met MANISH AND COMPANY, BUT WE HAVE DEVELOPED A RAPPORT AND THIS IS THE STARTING POINT.

              I HAVE NOT MET MANY HAPPY INSURANCE INVESTORs, THOUGH I KEEP MEETING HAPPY INSURANCE agents. Critics hurt only those who are party to wrong things. So are you being hurt??”

              Puneet Says:
              2. Agreed that agents sell endowment plans. You have problem with that because returns are less. The people are happy at these returns. An approximate figure is given to them and they are FOR it. And the figures indicated here are not blown up. They are given considering the past returns and are in range of 5-6% only. I am still speaking of endowment plans only

              My reply:
              “Ignorance is the cause of their happiness. Kids like to take everything into their mouth whether good or bad and they are happy about it. But as parents or as guide to investor, it is the responsibility of the ADVISOR to guide them about what is right and what is wrong. India is a country of saver and our saving rate is one of the highest in the world, but due to Financial Illiteracy and GREEDY AGENTS and Faulty system, we are not the richest. BOSS, the time will change. “

              Puneet Says:
              3. Come to ULIPs. I repeat my point again. If someone tells you returns of 6%, you are sad. If someone tells you 10%, you are not convinced (as markets are growing at 17% from 1990 and all that stuff). And if someone assumes more than 10%, you have already started crying, IRDA, IRDA… What a fun man… What exactly do you want? Traffic for google adsense… You got it… Smart man. Please don’t take it personally. Its the common story of all sites

              My reply:
              “First have clarity on your views. Every time you criticize and then say “Don’t take personally”. Sounds diplomatic. Be clear. Even if you are criticizing, go ahead. Everyone have their right to put their views.

              The point is not 6%, 10% or 17% in case of ULIPs. The matter is that Agents use these tools not to guide people but to misguide them. I don’t think so even Insurance Agent understand Debt or equity or ULIP in its true sense. In fact, ULIP is a product which is a great Asset Allocation Tool where you are take required healthy sum assured at the beginning, maintain debt and equity portfolio in such a way that you reach to your desired goal. Switches are there not to time the market but to REBALANCE the portfolio. Boss, tell me one thing, is this is the way ULIP is sold? Now if agent does not understand the main USP of the product, do you think that investor would know anything. “

              Puneet Says:
              4. Come to term insurance. Who wants to buy? I dont know why people themselves do not have a taste for it. When I meet a person who is from lower-middle class, he does not like a plan where there are no returns. When I meet a middle-upper class, he says he wants ULIPs only and he is ready to risk. Of course, there are people who ask for term insurance and I get that done too. And again, after getting that done, he says, he did a mistake

              My reply:
              “Now, this is something funny. In the last 50 years, LIC has taught Indians everything else but INSURANCE. Now in the last few years, the number of Term Insurance sales is going up and dear remember, the counting till hundred starts with one only.
              The agent by name itself are MRs (Medical Representatives). They don’t care whether client gets right product or not. All they are interested is that their sales target should be met and CUSTOMER is EQUAL TO KASTH-MEIN-MAR for them. Think of a lower middle class family and imagine if the bread earner dies without having adequate cover, what will happen. Agents just seems to have no sympathy. What will happen to small kids of someone who had 1 lac sum assured endowment policy? Kids will become either beggars or get into some bad activity. Take some pain and explain that you actually need a term insurance. Here in Jaipur, we are selling only term insurance and whether small or big, people do understand it. It is how you look at things. Only when people ask and you sell them, you are no more than just a seller. Don’t call your self advisor. “

              Puneet Says:
              5. Come to plus minus thing. Thats a foolish comment. Visit https://www.licindia.in/plan_navs.htm and see the NAVs and calculate the returns for yourself. Amidst bad market conditions in past 2 years, people who have invested in LIC Money Plus are in PROFIT (though its very nominal). What say??? And other plans, they are far ahead with higher NAVs. Bima Plus around 50, Jeevan Plus & Future Plus around 20. Market Plus around 15. Its only those plans which came in 2007 and the market corrected from 22000 to 8000 (and now back to 17000) that have just broken even (after all charges). Their NAV are in range of 11-12 (Money Plus, Fortune Plus, Profit Plus). Further, those plans which came in 2008 (Money Plus-I, Market Plus-I, Child fortune plus) are already in range of 14-15
              OPEN YOUR EYES Mr. MANISH. Stop looking google analytics and adsense. Start looking TRUTH. Dont take it personally. Its the story with all such sites

              My reply:
              “Again you are saying “don’t take it personally”. I am sure, Manish has a bigger heart than that of yours as he has all the powers to either edit your article or not to publish it. You seem to be hurt more than anyone else. If you are right why getting hurt?

              You are saying that Look at NAVs. The point is that return in NAVs of insurance product is not equal to return to investor because of so many loopholes and expenses. I will again talk of the basic point. Did the client understood the BASIC FUNCTION of ULIP as an Asset allocation tool? When the markets were high, there should be systematic switch to debt and when the markets are going down, there should be systematic switch to equity. Now you will say that, this does not happen in MFs also. Yes, because most of the distributors in MF are basically sellers of Insurance and their side business is MF. Over a period of time, when Financially Educated people will become more in number, I believe both ULIPs and MFs will be sold in right manner.
              Right now the question is that number of REAL advisor is less but that’s how a beginning is made.”

              Puneet Says:
              6. Last point of mutual funds. My investment of Rs 50000 in Reliance Tax Plan in 2007 is worth Rs 48000 today. And MFs do not have any charges right. Guess what if they charged something like 26% allocation charges??? My investment of Rs 20000 in ICICI Pru Tax Plan in 2007 is worth Rs 19000 today. What say??? Check the NAVs and speak the TRUTH

              My reply:
              “This is the basic problem. We need to understand as an advisor what clients wants and a good advisor is one who advises based on client’s need. Advising the best product is not possible at all. Why running behind that. Please try and understand that when we sit and discuss with client, discussion should be on his needs and not on products. Mostly we discuss a product with a client. Our article on Wealth Plus was to bring the fact to the people that this product is sold in a bad manner and not much about the merits or demerits of the product.”

              Puneet Says:
              7. Another reminder to everyone. There is NOTHING called guaranteed in market linked investments. Everything depends on markets only. Investments in 2008 are in more profits than in 2007. Investments in 2001 are in more profits than in 2000. All this evidences that INVESTMENTS ARE SUBJECT TO MARKET RISK. Its boldly written everywhere. And now you will say that people are not aware. All people on the internet at least are enough knowledgeable to be aware of this. If you really want to enlighten and empower people, go in the villages and places where people do not have this knowledge and conduct some investor education camps. I will come with you. Mark my words. I will come with you and tell these points openly and lets fire those agents who are guilty. But, I know you won’t. Why will you think of improving India? You are concerned about google adsense and getting site traffic. Dont take it personally. I am telling the general story of such sites

              My reply:
              “I am not sure what Manish thinks on this. But let me comment here. There is always a way to plan yourself. You need to have strategy to reach to masses and if we just pack our bags and go villages just like that, it may not be effective. First you need to create a team of like-minded person who can carry the message to each and every Indian. You should first develop a niche and some goodwill as well before just going to villages and speaking in front of them. But I must say that it is good that you are ready to go there. Now see, how Manish could find so many people who are ready to go villages. It is thru this blog only. Why you keep grumbling that he is just for money making?

              If you run behind money, you land up nowhere. If you run behind Goodwill, money chases you. Create a goodwill that you are here to serve and give right advise to people. No genuine person should mind if you are earning as well. Boss, I need to run my family as well.”

              Ashish Modani

            5. Puneet

              Leaving aside Ashish Reply , let me reply personally too .

              Your point :

              Of course, nothing to hide, I am very busy with huge sales of LIC Wealth Plus
              Allegations have always been there. The more they come, the better. It helps us a lot in understanding things. One sad point, when people are not able to reach heights, they start pulling others down 🙂

              My Reply :

              Yes, thats one sad truth of life , I agree .

              Your Point :

              A quick attempt to write my views now

              1. Agreed that agents mis-sell (for whatever reason, be it for commission, ignorance, misunderstanding, etc, etc). So, what next? Why don’t you write to IRDA and cancel their licenses??? I know you won’t. Coz, if you do that, your blog will have NO visitors and how will google pay you??? Sad… Nothing personal. Its the common story with all such sites. Criticize and condemn to get traffic

              My reply :

              I am not sure how misseller agents licence cancelling and traffic of this blog is connected . 60% of the traffic this blog comes from other search topics and not LIC or anythign related to LIC , rest 40% is direct or recommending wesites , so no visits are because of LIC . Can you please explain how you came to that conclusion , If it was just a sarcastic comment, lets forget it 😉 .

              Also its a common sense that we dont have each misselling agent contact id personally , so how will we cancel their licence by contacting LIC ? We are talking about the fact all over India , and not some bunch of agents we know personally . Also can we directly complain to IRDA that some agent is misselling and will it result in cancelling their license ? this is a question .. Ifs its true then great ! we can actually do it when the situation arise 🙂

              Your comment :

              2. Agreed that agents sell endowment plans. You have problem with that because returns are less. The people are happy at these returns. An approximate figure is given to them and they are FOR it. And the figures indicated here are not blown up. They are given considering the past returns and are in range of 5-6% only. I am still speaking of endowment plans only

              My Reply :

              So as Ashish Pointed out , Investors are Happy with those endowment policies because of their ignorance , they dont understand the potential of what they can get with that same amount and risk . Dont say that “but endowment is safe , what about safety ? ” , in long run , nothing beats equity , its a known fact , long term returns can range from 12-15% from equity and once a investors understands this , endowment does not make any sense .

              If you talk about returns part in percentage , almost all the investors (except a handful) only are aware of monetary return and not percentage return and they dont know how to calculate it . Even hundreds of readers on this blog were surprised to know that returns from endowment is so low in range of 5-6% .

              You and me can calcuate returns and are aware of the exact return in percentage terms , but investors do not understand it, if you are personally telling investors that endowment has 5-6% , then I should salute you and your honesty and if investors are buying the products after you tell them , then I should salute them too (and also feel sorry for them) .

              Your comment :

              3. Come to ULIPs. I repeat my point again. If someone tells you returns of 6%, you are sad. If someone tells you 10%, you are not convinced (as markets are growing at 17% from 1990 and all that stuff). And if someone assumes more than 10%, you have already started crying, IRDA, IRDA… What a fun man… What exactly do you want? Traffic for google adsense… You got it… Smart man. Please don’t take it personally. Its the common story of all sites

              My Reply :

              Investors who are sad at 6% and are happy at 10% or higher projection are at fault , because of their greediness , tell them higher return and they will feel more eagar to buy the products ,thats the problem , they dont concentrate on risk of this , and thats what this blog and other financial planners concentrate on . Tell them the risks involved .

              Agents understand investors psychology and exploit it , they project higher returns , be it mutual funds , ULIP or any other product , but they refrain to tell them the risks because the moment they tell them about the risk , the investors would run , their is an art of telling things and their is a right way of communicating the risk factors and investors will consider them and buy products , the problem is the training part . Read Jitendra Solanki’s comment on how he was given questions and answers both for LIC agency exam and he became one without knowing and understanding anything, and was told to concentrate on “gettting business” as he quotes . most of the agents themselves are not understanding the product in detail , how will they sell it in correct way .

              Your comment :

              4. Come to term insurance. Who wants to buy? I dont know why people themselves do not have a taste for it. When I meet a person who is from lower-middle class, he does not like a plan where there are no returns. When I meet a middle-upper class, he says he wants ULIPs only and he is ready to risk. Of course, there are people who ask for term insurance and I get that done too. And again, after getting that done, he says, he did a mistake

              My Reply

              You are stating the problem itself , which is ” People dont term insurance , because there are no returns” . This is what we have to change in India , people do not have taste because they dont have interest in it . There are thousands of readers on this blog who never liked term insurance , but once they understood why it makes sense , they loved it . We have to tell people that protection is more important than returns in the first place . If there is an insurance company , dont you think it should concentrate on teaching people what is term insurance and clear the myth that it makes sense to get proper protection first rather than investment .

              5. Come to plus minus thing. Thats a foolish comment. Visit https://www.licindia.in/plan_navs.htm and see the NAVs and calculate the returns for yourself. Amidst bad market conditions in past 2 years, people who have invested in LIC Money Plus are in PROFIT (though its very nominal). What say??? And other plans, they are far ahead with higher NAVs. Bima Plus around 50, Jeevan Plus & Future Plus around 20. Market Plus around 15. Its only those plans which came in 2007 and the market corrected from 22000 to 8000 (and now back to 17000) that have just broken even (after all charges). Their NAV are in range of 11-12 (Money Plus, Fortune Plus, Profit Plus). Further, those plans which came in 2008 (Money Plus-I, Market Plus-I, Child fortune plus) are already in range of 14-15
              OPEN YOUR EYES Mr. MANISH. Stop looking google analytics and adsense. Start looking TRUTH. Dont take it personally. Its the story with all such sites

              My Reply :

              Dont talk about absolute NAV’s , talk about investors return , the return which they got after factoring in costs, switching if they did any ? The fact that you are using “Dont take it personally” clearly indicates that you have already taken things personally , Puneet , your views are well taken and there is a reason why you beleive in some company or the products , which is ok .

              We are also trying to put our thoughts , the problem is not different views , its how we feel and talk about those , lets talk about it personally , you have been talking about my adsense and traffic , What is wrong in that ? If there is huge traffic on this blog and it can be monitized well by putting ads , should it not be done ? If I can take measures to drive traffic by writing more and more content and using imporatant keywords in between the content, these are some of the successful techniques to drive traffic to a website .

              Your comment :

              6. Last point of mutual funds. My investment of Rs 50000 in Reliance Tax Plan in 2007 is worth Rs 48000 today. And MFs do not have any charges right. Guess what if they charged something like 26% allocation charges??? My investment of Rs 20000 in ICICI Pru Tax Plan in 2007 is worth Rs 19000 today. What say??? Check the NAVs and speak the TRUTH

              My Reply :

              You are looking at mutual funds in the same way like other investors look at , the first point as you know is we should not look at mutual funds and also ULIP’s (equity) in short run as the returns are linked to market , and we cant complain to what has happened to them in short run of 2-3 yrs , Now this is the classic case of the similar situation , where you talked about ULIP returns , where the NAV was good , in the same way I checked returns of these funds in 1 yrs, 2 yrs and 3 yrs time frame and it shows good (valueresearchonline.com) .

              The problem is investors return , timing is one problem , looks like in this case your timing was bad , you invested at one of the highest point of market and left it after that , SIP would have helped a bit here. Check the data

              Reliance Tax Saver
              ———————
              1-Year 112.40
              2-Year 10.38
              3-Year 11.63

              ICICI Pru Tax Plan
              ———————
              1-Year 155.80
              2-Year 13.40
              3-Year 15.24
              5-Year 20.18

              So here are suggestions :

              a) Your choice of funds are not correct , these are laggards in comparion to other better funds which are long term winners like Sundaram Tax saver and HDFC tax saver . Choose these .
              a) Invest through SIP and dont look at short term performance , you should short term performance only for reviewing purpose and if they are consistenly performing bad, its time to change them , like in your case . But even if you choose these and keep investing , you will get decent returns .

              Your comment :

              7. Another reminder to everyone. There is NOTHING called guaranteed in market linked investments. Everything depends on markets only. Investments in 2008 are in more profits than in 2007. Investments in 2001 are in more profits than in 2000. All this evidences that INVESTMENTS ARE SUBJECT TO MARKET RISK. Its boldly written everywhere. And now you will say that people are not aware. All people on the internet at least are enough knowledgeable to be aware of this. If you really want to enlighten and empower people, go in the villages and places where people do not have this knowledge and conduct some investor education camps. I will come with you. Mark my words. I will come with you and tell these points openly and lets fire those agents who are guilty. But, I know you won’t. Why will you think of improving India? You are concerned about google adsense and getting site traffic. Dont take it personally. I am telling the general story of such sites

              Its always better to think reaching high rather than trying to bring others down. I had this habit of debating but now, I only discuss and clarify

              My reply :

              Going to Villages is important because thats where people need most education on , from school level to financial literacy , going to villages will require dedicated time and also money to cover the expenses . That will happen one day , but for now I can do whatever is in my means . Thanks for you that you will join in 😉 .

              Your Reply

              PS: By any change, are you an agent for Aegon Religare and lost your license for meeting targets 🙂 … Kidding

              My comment :

              Surprise !! Surprise !! . I am being sarcastic here 😉

              Note : Puneet , anyways , lets not take this in personal way and continue in what we are doing in our fields in the same way we are doing , we all have beliefs that something is wrong or right and we should always be strong on that point , whatever is right will be right and whatever is wrong will be wrong , so keep educating people about what you feel is right . So Chill 😉 .

              Thanks for having wonderful discussion and giving some of the longest comments on the blog . Now if you reply back , I seriously will have to hire someone for just typing 😉 .

              Manish

            6. Puneet says:

              I would definitely want to reply in detail but I am keeping it very short
              Firstly, you guys have taken the adsense part quite seriously. And I am very happy for that. My only point is to tell you that its wrong on someone’s part to blame others. Never ever blame others. Its not a character of a gentleman. Have a look at the title of this topic. It says that agents are mis-selling the LIC wealth plus and almost sounds like investors should not buy it
              Secondly, Ashish has taken the adsense part too seriously and has gone into moralities. It happens
              Thirdly, whatever I have written is the general investor sentiment. As an advisor running a brokerage firm & a private equity as well, for me, my client’s trust is the most important. When I sit and explain all the policies that LIC has, the clients usually tend to choose traditional plans and a SIP in a tax plan. This is the most favorite combination. Let me tell you once again here that I do NOT recommend anything to them. I only explain them the policies and they make the decisions. Perhaps, another major reason for people not showing interest in term insurance is that their companies have taken a group insurance cover on the employees
              Dear Ashish, I am not being arrogant. I am sorry if you felt so. It was just an exhibit of how businesses work. Of course, the working too will change with time. But please note that you can not say that things are wrong. Yes, you may say that they might not be appropriate
              Whenever I try to explain people of how their money can earn better returns in mutual funds or stock markets, most say they don’t want it. They are happy with 8-9% that banks offer
              There is a set of people who might go in for what you suggest and there is another major set of people who have their decisions set in their minds and you can not change them
              Once, I told one of my clients about the 4 switches available to him in a year (I tell it to everyone) and he almost shouted back at me, ‘If I have to do all that, what is the fund manager meant for?’

              Opinions differ. Choices differ. Expectations differ. We are all a part of the population. We are not the population

              I would not want to discuss any further as the point to point writing indicates that this has turned into a debate and opposition hitting the ruling party on every point, sort of :)…

              Lastly, one point I would want you to think upon
              1. You say that the investors are getting less returns in endowment plans
              2. You say that the investors must be told how much their money can earn if invested into better options like equity related funds
              3. Now the investor says that I get 7-8% in endowment plans, how much will I get in the new option that you are offering?
              4. Should I say 10% or 12% or 15% or 17% or 20%? Because there are problems at each point. At 10%, investor does not like the risk involved. At 12%, IRDA. At 15%, IRDA and mis-selling. At 17%, IRDA, misselling & making fool out of investor. At 20%, IRDA, misselling, making fool out of investor and beat the agent black and blue
              Note: If I say that the returns will depend on markets, he is not interested

              Puneet

            7. Puneet

              It was nice discussing with you our views on different things. I understand everybody has different view points .

              Keep in touch . Lets not take the discussion further . Nothing Personal Buddy ..

              Manish

            8. Venkat says:

              Dear Manish,

              Your views are brilliant in terms of investors trying to invest in wealth plus ULIP policies lured by unrealistic returns marketed by the agents. But looking from pute insurance perspective where wealth plus gurantees 10 times as life coverage in case of regular premimum payment, it makes sense. makes sense to go for this investment assuming even the investor will get only 6% as ROI at the end of the policy period. I think the average ROI on traditional endowment policy is much lesser for the same amount of life coverage.
              Please validate my views.

              Regards,

              Venkat

            9. Venkat

              May be you are true, but then you have to ask , cant you do better than this ?

              If you buy pure term plan and invest rest in Debt oriented mutual funds or even balanced funds , it would give you more return , it would be more simple , it would be more liquid , it would be less confusing , it would provide better insurance , you can stop it anytime , increase anytime etc etc

              Manish

            10. Venkat says:

              Yes. Manish. I agree with you. Can you please suggest a few good term plans for insurance coverage. Looking forward to your response.

              Regards,

              Venkat

  138. Jitendra solanki says:

    Hi,

    Very rightly pointed out.This misselling is happening ever since ULIPslaunched in india.

    The worst part is maximum contibution is from Urban Areas.I have been in touch with LIC agents from Rural Areas in UP and Urban Areas.I found the story is same across all catgories.And the killer man is not the agent.
    A shocking story how you become an LIC Agent.Around three years back i went to an LIC DO to talk to him for an agency.After submitting the required fees i was given a question paper and the answers of the same and was told to just ratto the answers and start generating business.Is this how an agency of LIC is given?
    Imagine the category of candidates becoming an LIC agent.
    So whom to blame LIC,Agent,DO or IRDA……….Product like these are in bulk now.But if agent himself doesn’t understand the product forget the customer……..

    1. Jitendra

      Thanks for bringing up the story of how LIC agents are made . I can understand that pressure of target achieving + lucrative commision structure are two main culprits of misselling , they give more air to fire of misselling 🙂

      What do you think about IRDA point of removing the upfront commisions from these kind of product , will they help ? Which UP small town was this by the way , I also belong to those places 🙂

      Manish

      1. Jitendr Solanki says:

        Manish,

        Well i belong to Bulandshahar but born & brought up in dehradun.Areas i am talking about is Saharanpur,Bulandshahar,Bijnor and Kotdwar.
        A more shocking story i tell you.One of my friends uncle died and he had an LIC policy of 2 lakh sum assured.Now when his family agent brought the cheque they were shocked to see a 1.5 lakh cheque.When they asked- they were told thet 50000 is being invested in a new policy.Now what???????
        I also met a DO at Kotdwar and told him how we as financial planners advice our customers.He gave me a statement-“why take such pain.We just go to teh customer,make him sign the form because they trust us and that’s it”.
        So in my view the grass root of this problem is not agents but they way agency is given by the companies.Can a 100 hr training to an art student make him an insuranec advisor.
        My personal view is there should be more than just a mandatory training and thats what i think we are discussing in Financial Literacy.
        About scrapping upfront commission-I believe cannot be done totally and is not possible.There will be some incentive for agents as no insurance company can survive without agents.But yes the commission needs to come at a level where they can justify the investment of a customer and agent advice.

        1. Jitendra

          I am amazed to hear how 50k was invested in another policy ? What is the reason ? Who authorised it ? Would like to hear more on that , what did agent answer when the family asked WHY ?

          The grass root problem is would say is mentality , currently insurance is sold !! . so we need to have agents who go and SELL !! I hope in coming decades when investors wake up and feel the need to BUY ! . then we would just need agents for facilitating them them forms and all .. that would be the day of another Independence day .

          Do you face issues like this with your clients ?
          What do you say ?

          Manish

          1. @ Manish
            “The grass root problem is would say is mentality , currently insurance is sold !! . so we need to have agents who go and SELL !! I hope in coming decades when investors wake up and feel the need to BUY ! .”

            No still it’s bought, in every add you will find “Insurance is the subject matter of the solicitation (बीमा आग्रह की विषयवस्तु है)

            पता नहीं आग्रह किसे करना है, भारत में तो आग्रह करने की जरूरत ही नहीं है. 🙂

            1. Hemant

              That was really hilarious , its a joke in face of IRDA i would say , they should change the punchline as

              “Bima ullu banane ki vastu hai” .. OR
              “Bima Logo ko emotional blackmail karne ki vastu hai”
              “Bima profit kamane ki vastu hai”
              “Bima has wo chij hai jo bhariyo ki waat lagwa de”
              “Bima wo chij hai jo, Lalu ke baccho ko crores ka commision 1 mahine me dilwa de”

              what say ?

              Manish

          2. jitendra Solanki says:

            Manish,

            I am still asking teh question and he also doesn’t know but then its happening.

            I have clients from private sector and public sector like UP Roadways.And the story is same -LIC policies for all solutions.But a good thing comes out -everyone want quality advice now and fed up with agents.
            When a customer object i always give an example-“you went to a doctor and he prescribe medicine for you.Asyou are about to leave the doctor says-take Rs.100 and visit next time to me only.Will you go and buy medicine of his advice” and this has worked very well with me.Especialy when i deal with govt.employees.

            But all said and done- these things need to be stopped.Marketing tactics lie these should be banned and companies should be forced to come with a simple explaination.I was shocked to hear when a cousien of mine -an LIC agent- told me that this poduct is being sold to villagers.

            1. Jitendra

              LIC products sold to villagers !! why dont they take some blood out of poor people and snatch some food out of their plates , thats a clean way .. is’nt it ? Atleast poor people people will understand whats happening with them !!

              Yup , Agents who are giving commisions back shows a very clear sign , that he is confident of earning more than what he is giving next time , and its a way to trap people , not just agents , even investors want these kind of agents and look for them . strange …

              Manish

            2. NEHAL says:

              i baught lic’s welath plus policy for 15 lax , single primium
              what is the futuer of my policy , after reading your artical i feel its too late , now i want to know after 8 yrs atlist i can get my orignal money back , i m not greedy , but i just want to make sure my money will secure , what are the chances in my case ???????????,

            3. Nehal

              Be with it , after 3 yr you can get out of it if things permit . there is assurity of your money back , dont worry

              Manish

  139. Marshal says:

    Thanks manish and co. it is really good piece of information!

    1. Marshal

      thanks , what are your views on how to correct this misselling problem in country , do you feel within 10 yrs , there will be substantial change ?

      Manish

      1. Marshal says:

        well manish collectively we have to educate others. really appreciate your efforts in sharing this information with online community, but how to reach mass that is something need to be figured out.
        you won’t believe it over this weekend i met couple of friends and cleared their mis conceptions about ULIPs and other money back lic policy.. mantra was not to mix insurance and investments returns.. thanks to your blog i was sounding geek 🙂

        1. Marshal

          nice that sounds great .. its nice to hear that jago readers are getting experts and teaching people some money game , keep it up .

          So what were there reactions on this ULIP and Endowment suspense 🙂 ?

          manish

          1. Marshal says:

            well I liked the word money game, to add more I have this E71 which has spreadsheet and I have two famous calculations of yours inflation and SIP investments. With this I was throwing figures as well.. One poor fellow was shocked to know about term insurance as he was already paying 50k p.a and planning to invest another 60k. But after discussion he decided to go surrender his existing polices and will opt for term insurance

            1. Ohh great Marshal

              Thats was a good work in personal finance space by you . you changed 1 life 🙂 . good work

              Manish

  140. rohit says:

    Hi Manish

    I am actually becoming a fan of yours I follow your web page oftenly to look for more meaning But I am too pathetic in terms of posting my comments

    I have a request if you can cover the topic of Not death insurance not critical illness insurance but the insurance which covers the policy holders get benefits if he is nota ble to work

    due to
    1> accident ( which is now a days more prone to that )
    2> critical Illness ( like heart , kidney , ..)
    3> Death due to violence

    Looking forward to your inputs

    1. Rohit

      nice to get your comments 🙂

      You should take accidental rider along with term insurance for any disability related risk .

      For critical illness either take “critical illness rider” or take a seperate Critical illness cover .

      Manish

      1. Krishna says:

        Manish,
        AR will cover AD and CI.http://www.aegonreligare.com/life-insurance-plans/increasing-term-plan.php.
        But if you take separate CI cover it is limited only to 5 years only.They will not cover for a long time.Also if you take increasing Term Insurance Plan your other riders will not increase with Base sum assured which wont be sufficient in the long term.

        1. Krishna

          thats the way is it right now . the better thing would be to have some term insurance out of iTerm plan and take the AD and CI riders there .

          Manish

          1. Krishna says:

            Manish,

            Do you mean that we should take both iterm and other term insurance plan from same insurer or from the other insurance company. Please clarify

            1. Krishna

              No , All I mean is

              1. Split your insurance
              2. Take from some company which you trust (this does not matter much actually) and make sure you have riders if you wish to take them .

              Better to avoid the same company 🙂

              manish

      2. rohit says:

        Hi Manish

        Thanks to your feedback But I am actually looking for sponfeeding 🙂 as I am very bad in selecting products , hope you or any one in this forum may help

        i have taken New India assurance perosnal accident policy but it only covers medical life for some period of time ( say 3 months ) so really again looking for help

        You have helped so much in past ,so looking forward to this specific points

        1. Rohit

          Do you have a term insuance ? IF no , then take one to cover your life and take AD and CI as riders 🙂

          Anyone else can suggest products for Rohit … ?

          Manish

        2. Subhendu Nath says:

          rohit,
          You can buy Personal Accident Policy From Any General insurance Company. Their is Two Product,
          1. Personal Accident Policy
          Cover:
          Death due to accident………….100% sum insured
          100%(permanent total disability) dissability…………………100% sum insured
          Parmanent partial dissability, Loss of sight of two eyes or two hands or two feet………………100% sum insured
          Loss of sight of one eye or one hand or one limb……………50% sum insured
          Premium: Rs 90-Rs. 1.90(depends on jobs he/she is doing)/per 1 lac+10.3% (service tax)
          their is other add on cover like…a)permanent pertial dissabalment (somebody selling it as hospital cash policy),b)medical expenses:
          2. Janatha Personal Accident Policy
          Premium :Rs 15/- /per 25000/- sum assured ,maxmum sum insured limit Rs.100,000.
          One can take this policy for 5 yr. premium wl b Rs.260/-, as bcoz Cntr. Govt. policy u need nt to pay any service tax.

  141. prashant says:

    hi,very nice nd informative articel manish
    i had one request /suggestion required—
    i had taken jeevan saral policy –39k/annum….2.5 yrs completed …i wanna stop it….how much loss i have to bear…..what to do in such scenario???
    i tried to put this request in foroum..but had some problems getting posted there…ihope u will understand my prob…hoping for ur answer

    1. Prashant

      You dont get anything if you stop LIC before 3 yrs . Only after 3 yrs you get something and that “something” is pathetically low if its just after 3 yrs, truely speaking you are standing at very ugly position right now . If you stop now , you loose everything , if you pay for total 3 yrs and then stop , still you get very small money which will be almost equal to what you pay as the next premium , may be more than that

      So truely speaking , its a bad situation .

      manish

  142. Chetan says:

    Hi Manish/Hemant/Ashish,

    Thanks for such an eyeopener article. Actually one my wife’s aunt has invested in this policy as well as LIC Jeevan Saral and since then she is insisting my wife to invest in these policies too. My wife asked me about this, I knew what LIC was doing from previous articles by Manish, I am really happy to read this article, posted just in time. Actually I had also did some research on it and was not in favour of inverting in these policies, but its very difficult to convince ladies, that too your wife, but now you guys have given me a strong analytical data to prove my point, Thanks one again.

    I would really appreciate if you could please advice me on LIC Jeevan Saral.

    keep up the good work, guys.

    1. Chetan

      You should also make them read Jeevan Tarang Review https://www.jagoinvestor.com/2009/08/review-of-jeevan-tarang-policy-from-lic.html and try to evaluate the plan on the same lines , I am sure there would a tough fight between Jeevan Tarang and Jeevan Saral on which one is the worst !! , this is because of my confidence in LIC products .

      I will try to work on Jeevan Saral 🙂 .

      Forward this link to them .

      Any reader who is willing to translate this article in Marathi and publish somewhere as it will help those investors who are more comfortable in non-English languages ?

      Manish

  143. Vimod Wills says:

    I appreciate the efforts taken by you and others to enlighten people regarding mis-selling of insurance policies. I am a victim of the same. How else can you explain the fact that I pay Rs 1.5 lakhs premium annually and have a total cover of only Rs 18 lakhs? All the agents had focussed on selling me endowment, money-back, whole life plans and ULIPs. I
    needed term insurance cover of at least Rs 1 crore. I was recently approached by officers at a LIC office regarding ‘Wealth Plus’ where they compared the projected returns to ‘Bima Gold’. I was able to ward of their persuasion as I had changed my investment pattern completely – only in stocks and mutual funds + term insurance. I don’t regard insurance as an investment. INSURANCE and INVESTMENT should be kept separate.

    1. Vimod

      I am glad you are thinking in those lines of keeping Investments and Insurance seperate 🙂 . I can understand your situation . Instead of paying 1.5 lacs there you could take 1 crore Insurance in just 25k per annum (assuming you are less than 30) and invest rest 1.25 lacs as 10k SIP per month in 3-4 funds . this would be a great situation .

      What do you think ? Which Company are you looking at as options ?

      manish

      1. Vimod Wills says:

        I am planning to take term insurance for Rs 75 lakhs with Religare Aegon’s
        i Term policy. I am 38 years – Religare will give it to me for Rs 15500 while LIC
        gives the same for Rs 36000 (annual premium).

        1. Vimod

          I would say dont go for whole 75 lac from AR , take some part from other insurer like SBI or HDFC , you might also need accidental and critical riders with the policy which AR will not provide you .

          What do you say ?

          Manish

        2. Deepak says:

          Vinod,

          I would advice you keep in mind all the calculations and just not 36000 vs 15500. I am afraid the other side might be 75lacs vs nothing in your absence

    2. @ Vimod

      You are lucky that you have 18 Lakh insurance(1.5 Lakh premium) & you now realise that you need more.

      I know many people who are happy with Insurance cover of 5 times their premium.

      In some cases it’s even less than their CAR’s cover but they think their car is more valuable asset than them. 🙁

      1. that was a hilarious comment, I somehow think that if we educate their wives about how much problem they will get into and how much they are going to suffer if things go wrong , then they will nag them so bad that men will take the proper insurance, the primary reason might be nagging and force from wives , but atleast it will happen :0

        What do you guys say 🙂 . oops , i have humour too.

        Manish

        1. rishabh parakh says:

          manish,

          your thinking is in absolutely right direction as if you look at the advt from these cos specially ICICI , they always centered around woman as for the reason you rightly said.

          one more imp thing from my experience is about all these insurance cos. as when they provide training to their agents or advisers 🙂 they always insist them to focus greatly on wives than husband:)

          1. @ Manish/Rishabh

            Hope you have seen movie “Saas Bahu & Sensex” Women were shown as equity traders making quick bucks & loosing them quickly. Quiet similar to guy traders who are stuck in Cycle of Greed, Fear & Hope. No matter you’re of any gender, investors are same but 99% of families where I serve as financial planner I see all decisions coming from male members & in 80% of cases women are not at all involved. But I try to sit with both of them & ask about their future goals, but surprisingly in maximum cases they never shared goals in between them.

            Indians have low financial literacy and specially in the case of women figure is even low. Every women must understand her needs and take financial decisions accordingly.

            The problem is that women are so much dependent on male counter parts that even if they have some knowledge they lack confidence to take financial decisions. In an unfortunate event when their husband or son dies on whom they were actually dependent, they just find themselves in financial mess even if they have assets with them.

            A Good Article to read:

            Hindustan Times Mint: Make the most of the women-only benefits in finance (Men–Must Read) It also Quotes Me – Banking Products
            http://tiny.cc/Woo

            1. Hemant

              Nice points , I accept it . Infact I am already writing an article on this and have some good points to make . Will publish soon 🙂 . Women have important role to play in personal finance and they can suggest some good ideas , but from ages men have dominated the field considering its not a women thing , but “Finance is as much as women topic , as much as cooking is a men’s topic”

              Thanks for the link 🙂 .

              manish

          2. Rishabh

            hmm .. yea . But they are training agents for wrong reasons , just because wives are generally nagging (sorry) and have comparitevely lesser understanding of financial stuff .. they are more prone to misselling 🙂

            Manish

        2. aniruddha joshi says:

          thats an INNOVATIVE IDEA OF THE CENTURY

  144. Krishna says:

    Hi,
    Manish
    Great Article(As usual). The misselling is due to the agents greedy nature to get comission. I beleive whoever gives these kind of Pomphlets sholud be jailed my agent chased me line anything for Market Plus even he complanied to my parents saying ur Son is not intersted in investing but I said strict No to him.How greedy the people even after retirement for money when they have enough will the LIC take action if we complain to them ?.Any idea

    1. Dear Krishna

      Do you think that the management of these insurance companies does not know about these mis-selling tactics? In fact they are the Creator of MIS-SELLING WEAPONS. LIC came up with MONEY PLUS when markets were booming in 2007 and it was easy for the investors to get convince on Equity linked products. In 2009, LIC cameup with JEEVAN Aastha when the markets were at their lows but retail investor was too scared of equity that time. Jeevan Aastha came with Guaranteed Returns of doubling your investment in 8-10 Years. since the launch of this product, Equity has given more than 100% return in less than a years time.

      Now when again people are getting convinced about the Equities again but are scared that their NAVs could go down as it happened in 2008, LIC comes up with HIGHEST NAV GUARANTEED POLICY. Though no where they state that the money will go in Equities only.
      The manufacturer just plays with the mind set of people at large and they dont bother what is righ or wrong; they are concerned that their product should sell.

      So to whom you will complain? Even the top authority at IRDA knows but nothing can be done unless a common man wakes up.

      May be we should think what will be the next BIG THEME of LIC for targeting small investors.

      Ashish Modani

      1. Krishna says:

        Hi,
        Ashish,

        Agree with your comments. It happens only in India

      2. Ashish

        Great point , you have pointed out the exact thing which is going on , Companies understand investors psychology and they know how much we value trust in India 🙂 . So to leverage upon the trust , company’s like SBI , ICICI , LIC which are big names come up with products at the right time when they would get maximum gains and the probability of selling the products is same, instead of teaching them the right investing mantra, the companies are just engaged in selling products and dont look at what is happening to investor money and their dreams .

        Manish

        1. @ Manish

          Manufacturers (Insurance or MF Cos) are just asset gatherers they will do what’s best for them. They earn their income from how much assets they have rather than how that asset performs.

          No one cares about investor. Investors have to learn it. Both distributor & manufacturer are not on their side. Media will not write this. 🙂

          Caveat emptor “Buyer Beware”

          1. Hemant

            True … no wonder the Mutual funds companies also showcase their AUM as one the criteria 🙂 . Agents will tell investors things like , this company has the highest amount invested through them so they are the best . Sundaram is such a small one compared to SBI or HDFC but they have one of the finest funds 🙂 .

            Manish

    2. Krishna

      I was laughing when you told me the complain story from agent , that is totally hilarious and worrying 🙂

      How can an agent “complain” to parents on these things , agents are representatives of companys and not investors .

      I think you can approach consumer court and insurance ombudsman , things will be in your favour if you are missold something , for simple complains like this better take care from your side .

      Is this agent a close relative ?

      Manish

      1. Dear Krishna/Manish

        I would like to add here..

        See these kinds of pamphlets are promoted all over India in more or less same manner. Now without the help of management, such mal practices cannot take place.

        If you go to any branch office, you will get such kinds of pamphlets.

        In fact the manufacturer himself is involved in these activities. They are interested in selling their product only whether or not it is good for investor or not. They always catch Investor psychology and come with a product that can be easily sold to investor.

        2007-2008 (Jan to March) –
        Those days Equity markets were booming and people were interested in buying Equities. So ULIPs were hot products and easily acceptable.
        LIC comes up with ULIPs (Money Plus, Market Plus etc.)

        2009 (Jan to March) –
        Here the confidence of retail investor was totally shaken and they were not interested in Equity. Guarantee/Debt Fund was the Buzz word.
        LIC comes up with Jeevan Aastha – double your money in 8-1o years.

        2010(Jan to March) – ULIPs are good but what if market tanks once again.. so retail investor wants equity with guarantee.
        Now LIC comes with Wealth Plus- Highest NAV – though they never mentioned that they will invest in equities.

        IRDA knows all about such malpractices, but they don’t do anything. Insurance lobby is too strong and it’s a racket at large level to catch retail investor’s money.

        Complains won’t work, education will make the difference.

        Ashish

        1. Ashish

          Good one .. the summary of time line with different products launched is a good post idea . What do you say ?

          manish

      2. @ Manish

        I read what you wrote on Twitter on Krishna’s comment. Complain 🙂

        Agent was trying to inculcate saving habits & you guys are not appreciating it. Haha

        God save people from such Agents.

        1. Hemant

          So now agents are entering in our families , good 🙂 . It happens only in India 🙂

          Manish

      3. Krishna says:

        Manish,
        He is not my relative.He is my dad’s close friend.If he wasnt that he would have been killed by me long back. He has many clients in our area,he has not spared even small vegetable vendor.If you argue with him the returns of Endowment policy of LIC are not good enough he will suggest to take more policies from LIC.From last 6 months he is behind me to push Money back policy but I am avoiding him i have covered 80C limit.

        1. Krishna

          That comment from your dad friend was hilarios , “Just because returns are low , take more policies” , this is pathetic Mathematics PJ , how does that solve return issue ? People like them still think about amount return and not absolute return 🙂 or CAGR return , bring him here , give me some moksha !

          manish

          1. Krishna says:

            No dude he is not a computer literate. The investor should be aware where he should be investing.
            I should thank you for creating awareness among investors.

            1. Krishna says:

              Manish

              One more query do we need to pay any comission if we purchase mutual fund thru trading a/c like sharekhan’s and others?.

            2. Krishna

              Definately you have to pay , demat accounts are just like agents , they are online agents 🙂 . there is no free lunch 🙂

              Manish

            3. Krishna

              Ok then he must be from the era of 50-70’s who are die hard fans of LIC and SBI .

              manish

  145. Srinivas says:

    Thanks Hemant Beniwal/Ashish Modani/Manish,

    Most people invest just because of the names LIC or SBI.
    They feel money is guaranteed. many of my friends who invested in ELSS are still under the impression that during maturity or redemption if market crashes, govt will back SBI or LIC and return his money…(What the hell)

    Though the internet revolution is growing ever before, As you said the reader community benefiting from finance blogs is less than 1%.
    People just don’t want to spend few hours of study before buying any product.

    Even I am finding it hard to change my parents, sisters hard-set mind. LIC and SBI are like GOD for them. I have told my father to keep FD in karnataka bank as it was offering 2.5% more than SBI, but still he kept FD in SBI. He says SBI is safe.

    Most of the agents I know, they call them self now Financial advisers. When I start asking questions….they say “no investors asks this much questions, you can talk to my development officer”

    1. Srinivas

      Thanks for your inputs , I feel sorry for those friends who feel that Mutual funds companies will be backed off by SBI or govt 🙂 . They should know that even two companies under Mukesh Ambani are totally different and fight for things , sue each other 🙂 . SBI mutual funds and SBI are different 🙂

      Agents dont like people who ask a lot , even I face issues , when some one calls me on phone and tells me plans , i keep asking things and finally I end up with their senior officer and then manager and finally they are the one to end up the call with “Sir , We will get back to you soon on this” 🙂

      Srinivas , what do you feel about investors psychology when it comes to guaranteed products like this ? That too from a company whom we trust , dont you think things like “trust” and “over confidence” has taken over “logic” in investing . especially with LIC and SBI .

      Just see example of your friends and who ever is associated to you . how do you things changing in coming years like say 15 yrs ?

      Manish

      1. Srinivas says:

        Compared to Indian population, The % of people investing in equities is very less.
        leaving apart rural population, urban population are the bread and cream of agents/sales executives.

        Urban population can easily get access to more information but still lack of interest, laziness make up opt from wrong products.
        LIC is just misusing people’s trust and typical Indian investors mentality of mixing investment with insurance.

        The word “LIC” and “Guaranteed” are given preference than actual policy name.
        Agents should not be blamed here, it is LIC senior officers who are eager to achieve target by hook or cook.

        Most of the agents “just say, what they are told to say”.

        1. Srinivas

          “leaving apart rural population, urban population are the bread and cream of agents/sales executives.”

          I dont agree on this , there are close to thousands small cities and towns in our country and the only bank account there is SBI and only policies sold are LIC . so even if they make a smaller chunk , the large numbers do wonders and I would say the biggest revenues come from small cities , Big cities have population of just 10-15 crores , rest 85 crores is still in small cities and villages .

          do you have a different take on this , this was my way of thinking , with no date proof , glad to get some data or a different perspective from you .

          manish

    2. @ Srininvas

      Thanks to you.

      As after your post on Jago (Floating Rate Mutual Funds – How, When and Why?) I came to know that Manish even publishes guest Post.

      And not say “Atithi Tum Kab Jaoge” 

      1. Hemant

        The last 2 posts before Floating rate funds article was also guest posts 🙂

        Real Story about an Investor who Fought for 9 months with ICICI Bank ( Some_one_I_cant_Name )
        Impact of New Income Tax Slab on Common Man ( Rishabh )

        And some more are in the queue . not to mention my lazyness these days is also why I am putting more of guest post .

        Manish

  146. S S says:

    Good analysis, did see it, agent was telling something, literally I didnt notice misselling but was in no mood to block money that time so I was saved.
    BTW I must admire your passion posting a blog at 3 am is really big task. Wish your readers were so passionate.

    1. SS

      Great , that was a good decision to back off on something like that .

      I must say the readers here are very passionate and I am glad to get readers like you , keep commenting and share the knowledge and get involved in discussions .

      manish

  147. Subhendu Nath says:

    Thanks Manish for bringing up this burning issues today. As a agent I can confirm you that these pamphlet actually circulated by LIC office. If you have any doubts go to any LIC branch ask any sales manager or BM they will tell you same. Actually agents sell the product because they are misguided by Senior LIC officials but unfortunately when debate arise agents are vindicated and punished. The projection shown in the phamphlet, circulated to us at the time product launch meeting. For a wealth plus policy LIC given extra incentive to us. But yes you are absolutely true we should think about our client not LIC/BM/DO. It is not true that agents always think about their pocket,they bound to sell product sometime otherwise they face a painful situation. Ask any Insurance company/agent how many term insurance they sell, they wont tell you the truth. IRDA also not interested about selling pure term insurance product otherwise they also issue circular to increase the term insurance sales growth. If this is the situation what will a agent do? Either he has to terminate his agency or keep continuing same practice as Big agents/Insurance Company/IRDA like to do.

    1. Subhendu

      Bravo !! .. I am amazed at the honesty from you, you are indeed the kind of agents we need our country 🙂 . I knew seniors at the company at involved at some level , the reasons are simple , they themselves do not understand Insurance well . I would not be amazed to hear that 95%+ officers and agents in Whole of LIC or Insurance sector would be under insured themselves 🙂 .

      IRDA needs to take care of these issues soon else I can see the day from here when there will be a bigger underinsurance mess (its already there) in the country .

      Subhendu , will you be able to provide more material on this or any other misselling or what happen “inside” ? I can publish it with your help (as anonymous) . What do you think ?

      manish

    2. @ Suhendu

      You Were right.

      Today one reader forwarded a mail where LIC’s Chief Manager is writing “Projection is taken at 24% very CONSERVATIVELY but the actual annualised yield is over 35%”

  148. puneet says:

    india is such a bullshit country…no respect for people…everyone is just so damn greedy to make money out of everyone else… i hate it…

    1. Puneet

      I agree that our country has this problem which is making life difficult for everyone and frankly people have no idea that they are in deep mess .

      There are good guys too , things will change , it will take time , have the belief .

      manish

  149. hurtlocker says:

    my friends family was told by LIC agent to invest in LIC BIMA, that is if they invest 1 lakh for 15 years they will get 1 crore. And guess what the agent managed to convince them. This was done two years back, i am telling them to stop paying premiums but they dont believe me.

    1. HurtLocker

      1 lack for 15 yrs and 1 crore !! .. thats 22% return . Its tough if not impossible , how can they tell them that kind of return estimation . i dont agree for more than 15% possibility in long run .

      So why dont you drag them to me or this place directly , are they not ready to learn ?

      manish

  150. Debashish says:

    Good analysis Manish , I have heard a few people in office talking about the policy last week . Hopefully yeh article padhke woh jag gayenge (Jago,,.) .

    Also can you include compare the promised return and actual return till Date for LIC Money Plus policy in the article .
    Here is my rough calculation (I have considered charges for 1st year only )
    If some one had invested 1 Lakh in Dec 2006 (Launch of Money Plus scheme) . The values today will be as follow
    Bond Fund – 1.187Lakh (~ 6.2% per Anuum )
    Secured Fund – 1.186 Lakh(~ 6.2% per Anuum )
    Balance Fund- 1.198 Lakh(~ 6.6% per Anuum )
    Growth Fund – 1.065 Lakh (~ 2.18% per Anuum )

    -debashish

    1. Debashish

      You can forward this article link on the internal mailing list of your company 🙂 . That would be a public service + promotion 🙂

      Your rough calculations look good 🙂 . better that we have it in comment rather than in article , we can do a seperate post 🙂

      Manish

    2. @ Debashish

      One more problem people feel safe in crowd. As you said they were talking in office. If one of them buys this product, others will follow.

      They don’t want to do any research at their own & take reference/confirmation from friends/colleagues.

      Sir John Templeton said “If you want to have a better performance than the crowd, you must do things differently from the crowd.”

      1. Debasish/Hemant

        “If you want to have a better performance than the crowd, you must do things differently from the crowd.” .

        This is seriously something we dont understand subconciously , not just investment , its true in other aspects of life , i have friends who are doing regular jobs at companies like everyone else ,but they dreams of earning millions somehow .

        People some times dont have confidence that they can be right sometimes , even if they have a sense that a product is junk and they should not get into it , there friends and fathers can sometime convince them that they are odd one out and are thinking wrong .

        Manish

      2. Debashish says:

        Correctly said , during feb, march (tax saving seasons )you generally get hilarious statements . One form today – “I have never done any investment in 4 yrs of my job , thats why i am investing 50k in lic wealth plus” 🙂

        1. Hehe

          Thats like because I have not eaten anything in last 12 hours and I “feel” I am hungry (but in reality he is not) , so I am eating some shit !! to satisfy myself .

          manish

          1. Debashish says:

            nice analogy , though I will say its not Shit but Unhealthy Junk . Is not that we all do ??(eating junk )

  151. pattu says:

    Nice article. SBI agents (they call themselves advisors now)! still circulate such pamphlets. LIC agents also do this at least verbally. Mis-selling apart I think an article could be written on “who should take an ULIP?”. I strongly believe in not mixing insurance and investment however a ULIP could be useful to someone(!?)

    LICs health plus is also a similar ULIP. It is also missold to some extent. However it has some benefits like hospital case and sugery benefit. Its probably the only ULIP I will ever consider

    1. Pattu

      I didnt review it from “Who shall buy it and who shall not” point, but from misselling point . However the review from return point is very much similar to regular ulips .

      I think ULIP can be useful for people who like to trade markets on 2-6 months time frame and are good at it 🙂

      What do you feel ?

      Manish

    2. rishabh parakh says:

      Pattu / Manish,

      SBI smart ulip is like the same product as LIC wealth plus and SBI is no 1 today and they have sold more nos of that policy than any other co.

      SBI is also a GOD like LIC for most of the people. specially if you talk about their Mutual fund house which does not have any coorelation with the Bank on which they are Banking 🙂 🙂 🙂 see also their largely and supposed to be the no. 1 product “SBI magnum tax gain”

      i think people also should understand and do their homework before buying from these cos.

      1. Rishabh

        How come you know SBI has sold more policy than any other company , I am sure they must not be above LIC . LIC has sold crores of policies , any data source ?

        I really agree with you that people think SBI MF should be great just because SBI banking is good . LIC Ulips will be great just because LIC is 50 yrs old .

        If that were true why not video.google.com did any wonder in front of youtube and finally forced google to “kneel down” in front of them . Why dont Orkut come even closer to Facebook when it comes to social networking .. 🙂 . Great things are great but not in every field .

        manish

        1. rishabh parakh says:

          Manish,

          right there is no body even near LIC and can also not come in near future,

          the point was that SBI a late entrant in life insurance and by banking on their name have reached at the top (pvt cos) at a furious speed.

          1. Rishabh

            Ok , if you were talking about pvt companies , then its true 🙂 . I would say their success going to SBI Bank name 🙂 . Otherwise there are better ULIP’s from other companies ..

            Manish

        2. Dear Manish, plz. note LIC is a late entrant in this field of Highest NAV Gtd. product. SBI Life was the pioneer with it’s SBI Smart ULIP. The reason is simple for sell of higher SBI policies (I’m talking here only for Smart ULIP), SBI life had launched the policy exactly 1 year ago.

          This is the only reason that SBI had managed to sell more Highest NAV Gtd. policy than any other Life Ins. co. (including LIC). But due to it’s size & reach all over india, LIC is catching fast & ‘ll outnumber SBI very shortly.

          Thanks

          Ashal

          1. Ashal

            yes , I agree , LIC has a better reach and Brand compared to SBI (though its a strong player) when it comes to Insurance policies . No matter what people are going to trust LIC more than SBI for Insurance .

            So in coming years , LIC will take the lead , by the way , where can you get the data for who has sold more number of policies .

            Manish

  152. Ajay says:

    Good one. There are more similar products in the market now. Investors need to be careful and read all the fine print carefully.

    1. Amit Kumar says:

      Amazing article Manish!

      I knew that agents show manipulated Benefit Illustrations of Insurance Products, but it was really shocking to see the similar pamphlet throughout India. Its not possible without involvement of a higher LIC official.

      In fact a few days back I published how to read the “Benefit Illustration” table for ULIPs on my blog and I guess more such awareness effort should be made by IRDA.

      @ Ajay
      Yeh I know that Investors need to be careful and read all the fine print carefully. but do you think that the kind of language used in fine print can be understood by anyone? Leave alone insurance and most of the financial products have a lot of fine print and even most savvy investor at times doesn’t have time, patience to go through them. Just think how many of us have read credit card fine prints or your demat account fine prints?

      1. Amit

        I agree that fine prints are not written in right font and written in such a way that it makes investors avoid it .

        Manish

    2. Ajay

      I think the other products are very much same like this LIC Wealth plus . The best thing in this one is that it does not need much publicity , hide the word “Wealth Plus” and show off “LIC” and its Sold before you know anything 🙂

      What do you think about products like this , do you think it can be useful for any section of investors ?

      Manish

    3. @ Ajay

      People should remember “the big print give it and the fine print take it away”.

      1. Hemant

        truely speaking I have no idea what it means ?

        Manish

  153. Mohan says:

    Wonderful way to catch them red handed! Good job Manish… the fact is that the investors are still going by what the agents are selling and not taking a wise decision of verifying the facts before purchasing. There has been an exhaustive discussion about the merits and demerits of this LIC Wealth Plus on my blog.

    You not only caught them red handed with their mis-selling but also bought in the guidelines by RBI. All such agents licenses should be canceled outright!

    1. Ajay says:

      @Mohan,
      I visited your blog too… Excellent one and keep it coming.

      1. Mohan says:

        Thanks Ajay!

        1. Lucky says:

          Hey Mohan,

          I visited your blog. Its really interesting. I think that you should post about the frauds and misunderstandings like mentioned in this article.

    2. Mohan

      I saw your article , it was nice and crisp 🙂 . But what are your opinion on “awareness through blogs and internet” by people like you and me , how many people out of all are actually benefitting , is the benefit too less , i think not even .1% impact is there .

      Manish

      1. Mohan says:

        Atleast people are getting some kind of awareness. It is the shared knowledge with and from your readers that make the blogs a great place.

        thanks 🙂

        1. Comments are the true life of any blog , I am glad to have readers who keep commenting and make this place lively .

          Manish

    3. @ Mohan

      Very righty said “Caught them red handed” but do you think that makes any difference.

      Today I asked one of the editors of business newspaper to add comment on the article. He said “Rot is so deep that commenting is not going to help” & “it’s an institutional Fraud”

      1. Hemant

        Media can help in some ways , but i think they are afraid at some point and feel that small things wont help just because the other party is such a big one .

        That has to change .

        Manish

      2. rishabh parakh says:

        Mohan, Hemant / Manish

        even they (Media) cant too much about this as their main source of revenue comes from these industries only through advt, else if they take the matter up it requires hardly a few weeks to change the entire scenario, literally they have the great POWER but not the responsibility as ultimately they are also in to business of making money by making news,

        what say

        1. Rishabh

          Yes , Media is one such thing which can change the entire thing , but they are dependent on these companies for their own bread and butter 🙂 . How about starting a news channel “Jagoinvestor TV” . hehe

          Manish

          1. @ Manish

            Jago TV 🙂 too ambitious.

            Who will give you ad. on this.

            1. Hemant

              The ads can come from Financial planners , wealth managers , NGO’s working in literacy field etc . just that we will never break even.. oops .

              Manish

  154. Thanks Manish for bringing truth in front of all Indians.

    1. Hemant

      I am thankful to get a nice article from you , I am sure it would be a great experience to get more stuff from you in future .

      What do you think about agents who are actually not missellers and actually frustrated by this blame game on misselling , they take things personally , remember Puneet on twitter 🙂 : http://search.twitter.com/search?q=chnmanish+puneet3210

      Manish

      1. Ashish Modani says:

        Dear Manish

        First of all thanks for posting our article. In India, the problem is that Insurance is never understood. Another way of telling is that Agents and Insurance Companies have never explained Insurance. I have never seen any Ad by an Insurance company which promotes Term Insurance and apart from Financial Planner, I have not seen any AGENT who sells Term Insurance alone. It is possible that a planner is an agent as he facilitaes client to buy a product but his intention is not to be an Agent of a company but to be a guide to an Individual.

        By definition, Agents are representatives of a Manufacturer and never a client. So anyone who is a financial guide and then an agent, I dont think so he will feel bad.

        Now about Agent feeling bad. If anyone who is selling just to earn and never bothers whether the product is right or wrong, we should not worry about such agents. Till date, I have not met any GOOD AGENT who does entire financial planning by selling Insurance policy alone.

        We all are human and we all want to earn. But the point is whether we want to earn by facilitating a right product to a right person or by selling a Bad product to INNOCENT people. Both can make you rich.

        Both Hemant and myself appreciate your efforts and we would also like to give more such article that can help investors at large.

        Ashish

        1. Ashish

          nice to get your comments , I would like to tell you that as a reader we have pure Term Plan agents like “Guru” who sells “only term insurance” because of his passion and interest in changing the things as they are in India . I am sure they are less in numbers but they are .

          Aegon religare is the only company I can think of which promotes term insurance more than any other insurer , and iTerm is a product with the intention , however the their claim ratio is not that good as per this year IRDA report .

          “Till date, I have not met any GOOD AGENT who does entire financial planning by selling Insurance policy alone. ” , Lets not call the agents as financial planners here . there are fee only financial planners who does advice on Term plan without any restriction on how the client will buy it .

          I would love to promote more articles from your guys and I hope they are as amazing as this one with proof of data and non-text things 🙂

          Good luck 🙂

          manish

          1. Karsudha says:

            Manish, where can I find the IRDA report to check the claim settlement ratio for each insurance company? I did glance through the IRDA site, however could not find the info. Appreciate if you can share the same. Thanks and keep up the great work.

            1. Karsudha

              The way you get there is :

              http://www.irdaindia.org/ -> Annual and Other Reports ) -> Annual Reports of Authority ) -> 2008-2009 Report

              Manish

          2. Pramod says:

            Dear Manish
            even I promote only term plan , health insurance n mf.

          3. Yogesh Pandey says:

            Manish,

            You may be right because you might not have meet such good agent but there are very few rare who does complete financial planning by selling Insurance policy alone.

        2. Sharanu says:

          HI Ashish

          Thanks for such a nice article ,
          I am financial planner , i sell MFs / Term insurance , I sell ONLY term insurance , the problem i see is the insurance companies in India aren’t willing to sell term insurance , its not just agents but the companies also wants to make money at people’s expense ,I used to sell LIC term insurance and was harassed by higher ups there to sell other ULIPs n endowment policies , i still remember the lines of zonal manager telling me ‘ why are so worried / concerned about your investor’s return you should 1st look at how much you can make and then think about rest of the people’ , so with such mentality at most places even the agents get such preachings so only god can help poor people.

          i switched my insurance provider company after getting irritated by LIC , and now also that kind of practice prevails here too , so this has deep roots hence takes time to eradicate m which can be done by educating common man.and Manish is doing good job at this , but i want to see this kind of education / proof to shown to rural people where the maximum loot is happening by agents .

          Manish / Ashish Keep up the good work.

          /Sharanu

          1. Sharanu

            thanks for your comment, as said by you , yes the roots are very deep in this kind of mentality, unless investor himself does not get aware about all the internals and how he can looted by some products , this whole mis-selling will continue . So we all should join hands and spread this financial literacy to others 🙂 . Which Insurance provider you work for right now ?

            Manish

        3. Kamlesh Bhangadia says:

          Hi Hemnath and Manish

          I am LIC Agent and also Financial Planner too.
          I never advise my clients for ULIP Plans, I advise clients based on their earning, Future requirements and Budget.

      2. @ Manish

        I saw an attractive add(google) on your website of LIC Agents Software.

        I clicked on that & checked the site. It’s openly showing an illustration of 14% in Wealth Plus on main page. At the end of illustration it’s written – For the Benefit of LIC Agent 🙁

        http://www.reinsure-life.com/?gclid=CIWf-sfrraACFdRA6wodaSX1ag

        If you want you can download this & add to main post.

        Everyone is robbing AAM AADMI.

        1. Hemant

          My God .. open robbery 🙂 . So just imagine how big Agent base is that there is a seperate software business run on this whole thing 🙂

          manish

        2. THOMAS says:

          To all concerned,

          Please do not buy the Insurance programme reinsure-life. The people do not help. Until you pay money they are good. Once the money is received and the name is registered they do not help. They make you running and would not help. Sales agents of this software in bangalore and mumbai are garbages.

          this is a good info for all agents.

          1. Thomas

            Can you explain what is it regarding ?

            Manish

          2. sunil patwa says:

            thx dear for alert to every one.

            1. Sunil

              Thanks , what are your views about the product

              Manish

      3. Mr Gupta wrote a mail to me:

        “I was planning to go in for this ‘wealth plus’, left the idea of buying it on reading the article.”

        I am sure in next 20 days we will be able to save many more Financial Lives.

        I request everyone to share this link with their friends. Someday they will help you in similar manner.

        https://www.jagoinvestor.com/2010/03/review-of-lics-wealth-plus-how-agents-are-miselling-it.html

        1. Wow !!

          Your article doing wonders 😉 . Seems like LIC agents will run after someone else , not me !! 🙂 hehe

          Manish

      4. vishnu c says:

        Dear

        I had taken a new policy from lic ,that is the wealth plus ,iam investing Rs 60000/ year can you mention how much i can take back after 3 years

        1. vishnu c

          You will get amount as per NAV at that time, there are no surrender charges for the policy after 3 yrs , its tough to predict the returns here .. depends on market , it can be as high as 50% or as low as 0% .

          Manish

    2. rishabh parakh says:

      really an eye opener article Hemant & Ashish,

      its a very sad truth and applies to most of the so called agents and the practice is not only limited to this product but across all the ULIP products (specially launched by LIC) by showing a returns of 25-30 %, for e.g. the most common one is to invest rs. 10000 p.a. for 3 yrs and get around 30lacs after 20 years.

      that’s the most common practice in small towns and is also sold widely very intelligently by keeping the premium amount low at rs. 10K only, and believe me i have got some of my friend’s parents & relatives calling me every now and then asking about the LIC products.

      i found really hard to convince them about these vague & rosy claims by LIC agents but people are so OBSESSED 🙂 and have Blind faith in LIC which is one of the main reason for these greedy agents to take advantage of.

      when do you think this can be stopped?

      1. rishabh parakh says:

        Manish,
        one more very imp. thing to note about the market today being flooded by “highest NAV guaranteed products” by almost all the cos. and its the largest selling product for these agents as they are justifying and covering the basic question asked by the customers about the risk involved in share market by telling that these is “GUARANTEED” 🙂 product

        and forget about the assured amount, you will get the HIGHEST recorded NAV making it very very lucrative for the customers to fall in.

        1. rishabh parakh says:

          The Guarantee is hollow and useless as its very unlikely that at the time of maturity NAV will be less than guaranteed NAV and also the majority of the investment is probably going to be in debt.

          Manish one more topic for you to cover after this immediately, is the analysis of this “guaranteed” 🙂 product.

          what do you?

          1. True

            The highest NAV for 7 yrs will probably be highest at some time between today and 7 yrs , these products make investors lazy and let them leave things to fate . instead rebalancing the portolfio should be the ideal way for them to get more returns .

            Manish

        2. Rishabh

          I will write on This topic soon and will dymystify the myth 🙂 . Companies these days are coming up with these kind of “innovative products”, but they way they manage the funds actually benefit them only , today they are saying highest NAV , tomm they will link it with highest return and some way again cheat people .

          manish

          1. kanika says:

            thank u mr. chauhan.you have actually started an online revolution.

      2. Ashish Modani says:

        Financial Literacy is gaining momentum and with Internet becoming part of everyone’s life, days are not far away where people will be more aware.

        But its difficult to forsee that all the investors will be knowledgeable and they will buy the RIGHT product but we should do what best we can do. You might be astonished to note that even in a country like USA, common man still not a good investor. From the year, 1985 to 2004, the average returns from Diversified Equity MFs were 10.7% p.a., but investor’s return were just 3.7% p.a.

        These figures are despite the fact that Mutual Funds were actually intruduced in US and financial literacy is one of the highest there.

        Ashish Modani

        1. Ashish

          Thanks for the data on US investors , What is the difference in MF returns and Investors return as you mentioned .

          I am sure similar kind of data should be there in India too . Please share .

          Manish

          1. Manish

            Return from Mutual Fund means the increase in NAV from Point A to Point B.
            Return to investor mean how much an investor earned from that fund.

            Reliance Growth has return is more than 40 times since last 14 years. This is fund’s return.
            But the average money investors would have made need not be 40 times.

            Though US data I got it from Nick Murray’s CD. I don’t think so such data is available for Indian investor till date.

            Ashish

            1. Ashish

              Ok , I got it what you are talking about , yes the fact the investors dont stay intact with a fund considering value investing model and keep on buying and selling and hence underperform the fund 🙂

              once investors understand that they need to take less actions on their investments , they will earn more .

              Manish

            2. maheshwar says:

              u can run any mission against lic policy & investments but the truth is u r a frustrated person. u r wasting ur tme as well as others time. mail me back , i wl supplement such informations about all pvt companis .
              find some other way to sell ur product to abuse lic fo indi or lic agents. i have bitter truth for u, too.

            3. Maheshwar

              You are emotional 🙂 . I mailed you .

              Manish

          2. @ Manish & every other reader

            “In USA from the year, 1985 to 2004, the average returns from Diversified Equity MFs were 10.7% p.a., but investor’s returns were just 3.7% p.a.”: Ashish

            Why?

            Because investors were churning and trying to beat fund manager (or may be thanks to mutual fund agents who were trying to predict markets or showing new opportunities).

            Example on similar lines:

            Peter Lynch was famous fund manager of Fidelity(US), he managed Magellan fund from 1977 until 1990. Fund Size grew upto $14 Billion or in today’s rupee term Rs 63000 Crore. The average return was 29.2% but investor hasn’t earned half of it.

            Either people should come out of greed & fear cycle or follow proper asset allocation approach.

            1. Hemant

              Ok , i got it now . So “investors return” meant the return of investors who were trying to invest directly . I was confused there 🙂

              This again brings an important point , that investors equate returns with actions . They try to do a lot of churning , investing in different products , because they think more they do , more they gain , which is acutally not true for the large section 🙂

              Thanks for the references 🙂 .

              Manish

      3. Rishabh

        I agree with you above the “small town obsession with LIC” part . just because a company is 50 yrs old and has reach in every corner of country does not make it a better one .

        Small places has a different problem , they are very much safe-loving people , they dont like the concept of loosing money in investment , They feel like SBI and LIC are some kind of God gifted organisation for their personal welfare .

        Changing this is difficult , very hard and a slow process , we need commitment and hardwrk to change the mentality and we will do it , I am sure .

        Manish

      4. @ Rishabh

        Today one reader forwarded me a mail where LIC’s Chief Manager is writing “Projection is taken at 24% very CONSERVATIVELY but the actual annualised yield is over 35%”

        This problem is having very deep roots.

        1. Hemant

          Can you forward the mail to me or can you paste the contents here in comment , This is a serious topic .

          Can we make a team of people who demand explaination from IRDA , LIC or any organisation ?

          Manish

        2. rishabh parakh says:

          very true Hemant,

          apart from LIC, all the other cos are selling these products heavily and too easily also as people are getting lured by guranteed and highest returns from stock market.

    3. @ Manish

      Motto of Jago Investor & The Financial Literates is same.
      Providing quality financial information to as many as people as possible that empowers them to take right decision.

      We will love to contribute articles to you in future as well. We also write articles in HINDI, someday we will share it with you.

      Manish keep doing excellent work.

      असतो माँ सद गमय : From untruth, lead me to truth
      तमसो माँ ज्योतिर्गमय : From darkness, lead me to light

      1. Sure .. looking forward to it . I would like to do a small survey at my blog to find out the response for hindi articles . I am sure people would love it .

        Manish

    4. sambit kumar nanda says:

      dear friend
      thanx for the information.
      really LIC as a leader in insurance world in India, is misguiding the customer. basically those customers who are in rural areas and knows nothing about insurance, are misguided by the mis-selling of LIC agents as they know that insurance means LIC. as a training manager in SBI Life insurance, i also interact with some people who have invested thousands and lakhs in LIC’s so called high yield schemes by mortgaging and selling their assets. hope, such types of eye openings will really open up their eyes and brains. thanx again

      1. Sambit

        Thanks for your inputs , We appreciate your thoughts , but we not only talking about LIC here , but we are actually talking about all Insurance agents in Industry and every company, Even SBI stands at the same place , not sure less or more , but every company agents are some where misselling policies for their personal benefit and target pressures .

        What do you say ? May be we dont know all the story and would like to highlight things if we are ignorant .

        Manish

        1. Hai,
          I appreciate your efforts in exposing misselling of LIC’s Wealth Plus plan by some agents I also expect you to expose claim rejections by private Insurance players, outstanding claim ratio of all insurance cos, as per my knowledge pvt Insurance cos do not explain the charges of ulips and they do not show interest in a customer who askes for every detail it has happened in my case when I ask for the detailed presentation of any ulips of pvt cos they simply deny when i needed a soft copy of a detailed presentation they tell we do not have options to mail the presentation, but most of our LIC agents have a dedicated software from which we mail the presentations of our LIC plans with every single detail, I would like to clarify you that the pamplets which you have posted is only a “Agent Training Material” specifically to make the agent understand the product and approach the customer this material is not to meant to advertise the product still many of we agents present only in 6% and 10% returns but we also show comparing our earlier products and we use the word “Hypothetically” I know you know the meaning so I request you to comment on “Buy Insurance Products only from the trustworthy Agents”

          1. N. Parameshwara

            Thanks for your comment , I understand that its a learning material , but many agents are misusing it . I will add more data on claim rejections soon .

            Manish

      2. Bose says:

        Repeatedly mentioning – LIC misguiding is not correct. It may fetch you popularity- but not good. If you know some agent doing wrong- expose the agent. Automatically, wrong doing agents will decrease. All agents not bad. Some work tirelessly for their customers. Some treat LIC agent as a friend. Be fair. Put some good thing also. LIC letter also advise people not to misguide. You highlight only wrong. Please do good also, then it will be real- Jago.
        Wealth Plus give -Highest NAV over 7 years. NAV daily. Low Charges -Policy Administration, Fund Management etc. Thank Yoy

        1. Bose

          No , I dont intend to accuse of just LIC, we have taken LIC Wealth plus as an example . I accept that there are great agents too in the market , and they work very hard . we are only talking about majority

          manish

    5. Amol M says:

      LIC collected Rs. 3000 crore under Wealth Plus. That means people are buying it.

      http://www.business-standard.com/india/storypage.php?autono=389410

    6. Rakesh kumar says:

      I am a financial planner. but when i started my small business people is not ready to pay the advise charges so even i am back to selling ULIP products so i will get some income.
      worst situation is whenever i went for a meeting for LIC policy after all discussion Investor ask one very important question.

      “Discount kitna doge mishra ji mujhe 35% de rahe hain ”

      In these situation how we can help a investor.

      1. Rakesh

        With these kind of investors , it happens because they have been spoilt all these year from other agents who for getting business involve them in sharing their income . Other point of you have to show them that you are into into sharing income because you provide good service . If investors do not come to you , these investors will find out that they made a mistake at a higher cost come time in future .

        Manish

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