http://economictimes.indiatimes.com/Personal_Finance/Insurance/ Life_cos_say_cover_sale_by_MFs_affect_distribution_infrastructure/rssarticleshow/3405002.cms
The above story is about life insurance companies expressing concern on sale of insurance cover by mutual funds.
The insurance industry is strongly opposing this move. Life Insurance Council chief executive SB Mathur said: “Insurance companies are spending hundreds of crores on training agents to sell insurance. If mutual fund distributors are allowed to sell insurance without adequate training, the sanctity of the training would be lost.”
Mr SB Mathur’s self-righteous indignation is pathetic as well as misleading.
Even after spending hundreds of crores on product training, insurance agents are not selling the insurance products in the right spirit. Today unit-linked plans (ULIP) are the hottest product in the market. The reason is not because it is the best. It is one of the most miss-sold products in the market due to the high commissions offered to agents who sell ULIPs. Many cases have been found out were people go to banks to buy mutual funds and end up taking a ULIP Plan in the name of mutual funds. Insurance products are not marketed; they are sold.
October 13th, 2008 at 6:15 pm
The post is true of the current scenario…one just cannot go about selling insurance plans on a short training…its essential that one understands the need for insurance and then pitch for sale…Insurance agents go about selling plans to meet their targets and hoard huge commissions..hence they will prefer to sell that plan which brings them thick commission…even though insurance is highly regulated industry IRDA needs to rope in these agents in their regulations to curb the misselling issue.
October 14th, 2008 at 10:28 am
Mis-Selling of Financial Products is getting rampant and Investors are being cheated of money and financial securities. Mis-Selling is the Gift of Globalization, Entry of Financial Players and their heavy expansion plans AND whooping growth of Sensex.
Today, if I ask you to give me the name of Insurance Policies you have; hardly 10% of Investor can recollect the names of the policy plan. Imagine if you can’t remember the name how can you be confident that whatever has been told to you or whatever your agent / banker has promised to you while signing this scheme, you end up getting the same in future? Most of the organizations like Banks, Insurance Companies, AMC encourage their sales agents to sell high-commission products, regardless if whether they suit investors or not. “Producers and sellers often turn a blind eye towards Mis-selling in favor of business growth”
Financial products are pretty complex to understand and today AMC, Bankers; Advisors are taking benefit of that. You won’t believe but 1 out of 4 financial products being sold in this country is MIS SOLD. 80% of the Insurance policies sold in past two years have been UNIT LINKED INSURANCE PLANS. Up to 40% (and in some cases up to 60%) of First Year Premium goes into the pocket of Insurance Agents and you have been shown front end charges of only 5-6%.
Nationwide poll conducted by Bombay Times – TNS amongst 20-30 age groups revealed that 27% are ready to take unethical shortcuts to achieve their dreams. If you have given your hard earned money to a relationship manager who is at the age of 25-27 years, without taking second opinion or without doing enough research, you may be the next victim of MIS-SELLING.
Do you want to compromise your family’s future financial wellbeing just so that the agent can make a few bucks?
Please click below link to know more about MIS-SELLING – the EMERGING EVIL OF FINANCIAL SERVICES.
http://www.slideshare.net/mandalia.kaushal/misselling-the-rising-evil-in-financial-services-presentation
This is my humble approach to spread awareness.
Please send it to all your friends and relatives before they got trapped.
November 18th, 2008 at 8:13 pm
Insurance Products are sold by the companies also with the mind set of making profit. If they are suppose to sell insurance then why not only promote Term insurance since that is what the best form of insurance. Investment options are meant to increase the profitability of the insurance comapany, so my question to Mr Mathur is why mix insurance with investments and confuse people.
November 20th, 2008 at 12:28 am
I think the companies should not give their agents targets which cannot be achieved due to which they end up selling anything to the customers.