Insurance is good. Agents are not!. Review on Kotak Life Insurance

My advice to all in this case will be never to buy any insurance policy from agents who are doing insurance just for time pass or side business. Always buy insurance from an agent, who is very long into this business & has this as the major source of earning. Because that agent will not cheat you & will always be with you in case any problem arise.

But with part time agents the scenario is different. They are called orange juice by the insurance companies. As they are mainly housewives, retired people & small businessmen, they are hired by the company to extract juice once & throw them away. They are hired knowing that they have their own circle of friends, relatives & business circle from which they can take business. Those people are also aware that they can do this for a very short time. But in that short time they are at least able to do 7-8 policies & collect premiums worth 3 lakh rupees on an average. On that they get their own 35-40% comission..around 1 lakh rupees & then they forget this business. In this way insurance company also gets profit, the agent also gets profit & they leave you, the customer to deal with your fate.

Most of the part time agents are either your relatives/friends or the ones who contact you on phone & fix a meeting. Stay away from them, for your peace of mind.

Part timers are trained to sell or rather chipkao the insurance policy on client. So they will make all the false promises & commitments just to sell you the policy. They will give you a very rosy picture of returns. These people come across as very pushy, aggressive sellers & can go to any extent to sell you insurance policies.

Most of the agents are trained to scare the customer in the name of death. They would say something like “what will happen to your wife & kids if something happens to you. They would be homeless, foodless, uneducated, blah blah...." This is a very great selling tool which they use for selling & most of the times it works because they create a story around that.

There are some other things which you should always keep in mind.

1- ULIPs. Most of the people are not aware of share markets & NAV. But they end up buying ULIP insurance. ULIPs are strictly for those who can take risk with their money & understand NAVs. Moreover your policy statement shows you in loss because if NAV will be low, you will loose money & NAV is high you will earn profits. NAVs can change from loss to gain in a short span of 1 day also. ULIPs show profit only in long term(more than 10-15 years). However, if you can not take risk then ask your agent for endowment plan. In endowment the returns are guaranteed. Here guaranteed means guaranteed. There will be no cheating on this. But you will be surprised that most of the agents do not know the endowment plans of their own companies. It is because the companies themselves are not interested in endowment as the profits are less in them. These plans are there just because it is mandatory for company to have endowment plans as per IRDAs guidelines. Thats it.

2-Freelook period. As per the IRDA guidelines all the insurance policies comes with a free look period of 15 days. During this period you can return the policy & you will get full refund of what you had paid. You should always insist on Insurance bond within 2 days of payment. In that way you will still have 10-13 days to look into the bond properly & return it in case you want it. You should also know which branch is going to issue policy, so that if you don’t receive it soon, you can visit the branch. And if you want to return it, then be firm on your decision, no matter what agent says.

3- I think we should use our wisdom also before signing out the cheque. Because although how much the agent can push you to buy, its you at the end of the day who is going to pay. There is an option on the site of most of the companies, where you can select a plan, put number of years & premium amount & it will show you how much returns you will get. It’s a kind of insurance calculator& very useful. Don’t ever be in hurry to take policy, because this decision can haunt you for 10-20 years to come.

4- Also, do not forget to ask for cashback from the agent on your first year premium as on most of the policies the agents are paid commissions upto 35-40%. So they can easily give you 15-20% back. Most full time agents give that. Most of the part time agents do not give you any cash back, even if they promise you.

5-In case you have problem with agents forgetting you after they take your payment, don’t panic. They have not only forgotten you, but they have forgotten this business forever. Because part time agents have their own shelf life & survive for 3-4 months. This problem will never arise if you buy policy from full time agent who is in business for more than 5 years. Always check the agents IRDA license & check date from that.

6-The concept of selling insurance is based around false commitments & misselling. It is the general belief of the company that this way only they can achieve their targets & be in business. They sincerely believe that if you will pay for one year then it becomes your problem to pay for other years & even if you don’t pay they have nothing to loose. If you surrender the policy, there will be charges as high as 65-70% of the total.

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