Term Insurance - Let us not be taken for Ride(r). Review on Choosing an Insurance Provider

I had taken a couple of policies in 2004.

One was LIC's  Jeevan Anand with an yearly premium of 52+K for 15 years with a sum assured of 7 Lakhs(this I took it based on my Dad's advice)And personally I felt that I pay a sum close to 8L to get the SA for just 7L, of course the Bonus factor is there. But still I felt that it was not a good deal. Besides LIC, PPF, Nationalized banks are good only for retired people who are afraid to venture out was my perception. For people who are younger and have an appetite for risk, should look at new generation plans like uLip, which is a fushion of investment and insurance.

And with that thought I happen to opt for ING Vysya's uLIP for a Sum Assured for 20L for premium of 30K yearly for 20 years. The agent painted such a rosy picture about the market and the fund I got carried away, which I realized quite late afterwards that I just didn't do my home work.

This uLip was started when the market was 10K, when the markets crashed in 2008, the fund reached all time low, it was worse than my equities portfolio which I managed on my own,  I did not make such a bad loss like the fund that was managed by fund managers, who are supposed to be professionals.

For the people who argue that uLIP is a product for long term, which requires more than 7 years to give a decent return, nobody mentioned that we would not be able see the principal for the first 5 years. Besides the Admin charges, there were Mortality charges and fund charges and others, by which they began to eat my already diminished units.

I was waiting for the market to creep up, which happened on June, 2009. I surrendered and got back 112000 for the investment I made for 122000 with a loss of Rs.10, 000. While LIC had an accrued bonus of 105000/-.So this made my perception of LIC to change.

After I surrendered the uLIP, I thought of taking a term insurance. I looked at various policies, but unlike last time now I was much more careful.

I got in touch with an Insurance Agent, who are trained not to give the vital information. They are like vultures, with a sole aim of making money on the people's fear of providing a safety option to the loved ones.

He was hell bent on selling me a uLip again, with a yearly premium of 1L, which bought smile on my face. I quickly declined and said my astrologer has informed me not to get involved with uLips and I was looking for term plans alone.

He gave me a comparision between the term plans, and he left LIC this time putting is as NA. He had quoted ICICI pure protect and Aviva as the cheapest policies:-)

He did not give me any reason why there is a huge difference between the competing plans, or may be he wants to high-light only the plans where he gets a decent commision.

I googled and compared the different policies.

https://insurancepandit.com/life/life_term_quote.php?Birthdate=05/09/1977&gende
r=M&smoke_flag=N&sumassured=2500000&premium_payment_schedule[]=3

The premium were spread out from Rs.6796 to Rs.16076 for the same period and for the same Sum Assured. I was a bit taken back, why is there such a huge difference between the  plans, when they are competeting with each others.

Aviva for instance had two plans for the first one Aviva Life Sheild it was 10892, while they had another plan called Aviva Life Shield Plus(it should have been named as minus instead of plus) had a premium of Rs.6756.

The catch on these plans are that they have some riders like accident rider, permanent disablity that which are charged seperately. It is like if you order for Dosa, they just give you a plain dosa and you need to pay seperately for Chutney and sambhar. The higher premium paying plans include these riders as default.

Finally I decided to go for LIC Amulya Jeevan, as it looks to be a better plan. May be I am growing older:-)

The key takeaways are:-

1. Keep Insurance away from investment. It is a safety measure you proved for the loved ones, in your absense. So make sure that they get the benefits without hassles.

   
   




2. Never trust anyone with your financial management. It is your hard earned money, it is left to you to protect it. The advisors will just guide you to policies on which they  make more money. Do you homework properly before taking any decisons.

   
   




3. It is universal truth that the markets cannot be predicted, and it is equally true that there are no experts in the market.

   
   

Pls note I am not against uLips nor promoting LIC, I am mentioning the facts from my leanrings, please make  your  own decision. May be my losses could prevent you from making you own losses.