Dear Investors

I have got very interesting information through mail and I am forwarding the same as I got.

Insurance has been the most ab(used) word, thanks to the mis-selling done by most of the agents / Bank RMs. When earlier ULIPs was offering 40-50% commission, they were busy pushing ULIPs and now when ULIPs are a lot more better thanks to the cleaning work done by the regulator, the insurance companies and agents have shunned ULIPs and moved to selling endowment plans (plans which combines insurance and savings) as can be seen in the below chart which currently offers anywhere between 20-40% first year commission.



We would like to offer following suggestions so that you are not trapped in the game plan of the insurance mis-sellers.

1. The only insurance you should buy is a Term Plan. All other products like Endowment plans, ULIPs, Pension plans, Highest NAV plans are very expensive policies.
2. Never take insurance policies for investment purpose. The returns from endowment policies has been very dismal ranging from 5-7%. Mutual Funds or other avenues are much better vehicles for investments as they are very cost friendly.
3. Whenever an insurance agent or a Bank RM is pushing for a particular policy, ask him if he himself has purchased the same policy. You will know the truth and he will never trouble you next time.
4. Don't trust your agent blindly.
5. Don't take the advertisements at the face value. Most of the time they are mis-leading.
6. Read the fine print carefully ( “Nothing in fine print is ever good news.” ~ Andy Rooney)
7. Incase if you have been sold wrong policies in the last 1-5 years, its better to cut your losses and exit the policy rather then nursing the pain for another 15-20 years.

Pls read the below story on How Insurance Mis-sellers are fooling gullible investors carried out in ET Wealth (23rd July edition)

Warm Regards
Arvind Trivedi
Certified Financial Planner
arvind.trivedi79@gmail.com