100 reasons not to buy Policy from Bajaj Allianz. Review on Bajaj Allianz General Insurance

1. Dear friends,

I can tell u hundred reasons not to buy any policy from Bajaj Allianz Life Insurance. There is no transparency in their financial accounting. Rather it seems they don't have any qualified permanent financial accountant. I have an ECS connected premium payment mode. Some times they will not ask for the premium payment from your Bank for 2-3 months, then they will declare the policy lapsed. The worst part is that they never send you any info on premium due or even receipt for premium payment made through ECS. Also, they don't send any reminder to you if premium amount has not been received from your account. And to top it all, they will also not inform you that your policy is lapsed due to non-payment of premium, which is of course due to their own faults. There is absolutely no customer care. Even their customer care number remains out of order for days together. Their officials get changed in a few months after booking policy from you. You find yourself high and dry with nobody to help you.

2.    Please also remember that if you are an investor and do not require insurance, never go for any insurance plan, neither ULIP nor any other. Better go for mutual fund if you have liking for equity market and don't want to take much risk, or else a Fixed Deposit/ Term deposit in a good bank is also advisable, which gives you 9-10% assured annual returns. Insurance company charges hefty amount on allocation and other charges. It amounts to more than 30% of your total invested money in the first year and more than 10% of your invested money in subsequent years. Therefore, if market performs good and gives return in excess of 30% in first year and more than 10% in subsequent years, then only you will break even i.e. no profit no loss.

3.    To make it more simpler, look at the following actual data-(a)  Total Premium amount -  Rs. 5000/- per month(b)  Premium Money allocated 2nd year onwards - Rs. 4700/- p.m.(i.e 94%)(First year only 80%)(c)  Unallocated Premium amount - Rs 300/-(i.e. 6%)(d)  Service Tax on Unallocated Premium - Rs. 37.08(i.e. 0.74%)(e)  Mortality Charge - Rs. 21.65/-(i.e. 0.43%)(f)  Service Tax Charge - Rs. 2.68/-(i.e. 0.05%)(g)   Policy Admin Charge - Rs. 315/-(i.e.  6.3%)(h)  Service Tax on Policy Admin Charge - Rs. 38.93/-(i.e. 0.78%)(i)   Total money deducted from Premium amount every month - Rs. 715.34/-(i.e. 14.30%)(j)   Total Money Invested - 85.70%

4.   In the first three years the unit NAV of my ULIP increased from Rs.10.30 to Rs. 12.10  only. That makes a cumulative appreciation of just about 15% in three years(at an average of appx 5% every year). To sum it up - the value of my total investment in first 36 months is just about less than 90% of total invested amount;  say an investment of Rs. 1, 80, 000 was worth Rs. 1, 65, 000(after 03 years).   Dear friends, there can not be any more detailed explanation  than this. These things will never be told to you by the company executive. I was unaware and got swayed by promises of 20-30% annual growth. They only tell you the growth in NAV but don't tell you about these charges, which they deduct irrespective of fund performance. That is the reason due to which even if a ULIP Fund NAV increases by 10% every year, you will incur a net loss of about 5% on your money invested every year.(This explains how an investment of Rs. 1, 80, 000/- became Rs. 1, 65, 000/- after 03 years of investment). Bottomline check is "Ask the company executive about the current NAV of ULIP funds launched by the company in last five years with date of their launch, minus 10% from NAV for each year from date of launch, adjust for inflation 5-6% for each year and the remainder amount of NAV will tell you whether the invested amount is in loss or profit." Further,  your policy surrender is not permitted before three years and after three years your surrender value will be much less than your invested amount. Your only hope will be that one day market will perform exceedingly good and  give you return in excess of 35-40% so that you can earn at least 10-15% return on your investment.

5.  Latest NAV of this policy, as on 10 July 2016, is Rs.16.80, which means that after about 6 years and six months the NAV of the policy has increased by about 68%. To elucidate in actual terms, an investment of Rs. 3, 96, 000(Rs.5000x12= Rs.60, 000 per year x 42 months) has a net fund value of Rs.4, 52, 000/- after deductions as explained in Para 4 above, a gain of Rs.56, 000(appx) after six and a half years. Even a deposit in saving bank account would have fetched you much more interest than this after six and a half years. This is also an indication to judge the quality of their fund managers and corporate control & culture in the company.

6.    Please don't do the mistake of buying an insurance plan when you actually want to make an investment for returns. Don't mix insurance with investment. Thanks and regards. Happy Investing.