Read before buying insurance from insurance company

In todays market, you have different products offered by the same company. Some of these products are designed with the investor in mind and to provide maximum benefit to the Investor whereas some of products are designed to rob the Investor for the benefit of the insurance agent and the insurance company. I have used a strong word ROB because that is what some of the products actually do. To explain the relevance of my earlier statement, I would like to compare two different ULIPS currently offered by Bajaj Allianz

• New Unit Gain

• New Unit Gain Plus

Policy Administration Charge
New Unit Gain : Rs.600 per annum
New Unit Gain Plus : Rs. 240 per annum

Initial Loading Charges
New Unit Gain : 71.5% of first premium , 7% in second year, 6% in third year, 5% from fourth year.
New Unit Gain Plus : 24% of first premium, 3% from 2nd year onwards

Clearly, the charges in "New Unit Gain" are significantly higher than "New Unit Gain Plus". I checked to see if New Unit Gain offers any additional benefits to justify the higher charges. You will be suprised that "New Unit Gain" does not offer any additional benefit to justify these additional charges over "New Unit Gain Plus".

Very recently my co-worker was asked to take "New Unit Gain" policy by his insurance agent. He was not even told about "New Unit Gain Plus". The incentive for the agent to sell "New Unit Gain" is because he gets higher commision. I had a similar experience in the past with ICICI. The agent kept offering me "Lifetime" while "Lifetime II" was a much better product.

It is sad when insurance companies resort to such tactics to exploit the ignorance of thier customers for their own benefit. They should be more proactive in "stopping sale off" older products(like LIC) once they have launched newer/better products.

CONCLUSION
Donot leave it to the insurance agent to identify the product that best suits your needs. I have come across many insurance agents who are more interested in thier commission than your interests. So do your home work before buying a policy. Visit the website of the insurance company and download the brochures of the different products they offer and spend some time reading them. If you can't seem to understand the brochures, you might want to visit forums/blogsites (like moneycontrol.com) to get the opinion of others.

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