Wednesday, January 12, 2011

It’s a bird, it’s a plane – it’s superman! It’s investment, it’s tax-saving, it’s a disguised insurance pitch!

Yesterday, there was another call from yet another persevering insurance company tele-caller.
The caller started the pitch for a very attractive investment product. Of course, the person was transparent enough to mention the name of the company, which had the word “Life” in it. However, the word “Insurance” following “Life” was conveniently missed out. So what, even Yudhisthir once said, “Ashwatthama is dead. Naro vaa kunjaro vaa!”
I entertained the caller and asked her to proceed with the features of the investment option. She started asking about my profession and date of birth. I asked her why she wants to know these details. Conveniently she proceeded to the next question. She asked my name, which I have no problem in giving. After some standard script, she mentioned about continuation of “free” insurance cover even after the investment term gets over. I insisted that I was only interested in an investment product without insurance cover.
By now, many of you know the modus operandi. The caller starts with the call. If the person on the other side asks too many questions, the call is transferred to a senior. The senior comes on phone and talks to me in a very authoritative manner asking what my requirement was – as if I called.
He had a very good answer for my point of an investment product without insurance cover. He said, “We are offering this small insurance cover so that your returns become tax-free.” Hello, is the regulator listening? Here is a standard pitch from insurance companies that they are selling an investment product (which is NOT a mutual fund according to IRDA). The insurance cover is given only to make the returns tax-free. These insurance companies do not want to change!
For how long will we allow such wrong approaches?
I haven’t taken the company’s name. Doesn’t matter! Those who practice such things, anyway know. Request to the poor investor, please do not fall into the trap of such calls.
Buyer beware!

1 comment:

  1. There are various facets one has to look into to see why such practices are ubiquitous.
    1. India is a large country which means you keep trying until you are lucky. so keep calling, btw, they know their hit ratios too very well
    2. They want to bank upon the complexity of the product. While an MF is easy to explain, ULIPs are far more complex
    3. The laymen is not as well read as some of us are. They will easily fall into such traps as they are looking for the most convenient answers rather than the best answers
    4. There is not enough talent pool in the country which can do justice to such complex products. It will take time. Until then we have to be at their mercy
    5. The product itself is waste of money. (more so, the traditional products). So, if one is asked to sell these products he/she will have to make it look beautiful (read tax-free etc.)
    6. The real problem may well be the medium itself. Misselling over the phone is far more comfortable then misselling in person. Because in two hours you can easily bluff to 20 people and hope that one is sold. While if you are meeting some one in person all the time you may make that extra effort to talk sensibly.