Misselling has been the backbone of selling financial products. Insurance, Mutual funds or even direct equities, the buyer has always been on the receiving end. It was when things went worse that the regulator IRDA has to step in to curb this rampant misselling and so it brought changes to the product structures. Even our Honorable Finance Minister said to insurers few days back “Don’t mis-sell Insurance”. But these sellers have found innovative ways of selling to ensure they get their number running.
Luckily, for most of readers, I happen to involve with such a conversation and here is what it produced- A Gem of a Misselling.
Caller– Sir, I have called you for a wonderful savings product from an insurance company. Can I take your two minutes.
Me– Yes (I was keen to hear the “wonderful “ )
Caller– Sir, we have a very good savings plan which guarantees you 13% return in three year’s time.
Me– That’s great ! How? (Made me more keen now)
Caller– If you invest Rs 30000 annually for three years you will receive Rs 118800. Not only this, you will receive 65% of first year premium which was is given to agents because you are investing directly with the company. And sir the company is giving you Life Insurance of Rs 360000 without charging anything from you..i, e. free of cost. (Superb she knows the number so perfectly)
Me– So how much I receive ?
Caller– In total you receive Rs 136000 after three years. And all this tax free.
Me– Is company guaranteeing the amount?
Caller– Yes Sir. The company will give you in writing on a bond paper (Do not know what she meant by bond paperJ)
Me– That sounds great . But is the plan for 3 years only.
Caller– No Sir. The insurance plan is for 10 years and you can even pay for 10 years. But this is a special featured offered in the fourth year. (Remind me of ULIP days). I am connecting you to my senior for more details.
Senior– Hello Sir. Actually the additional money you are getting is not commission but loyalty bonus.
Me– Oh!! I thought this company has started giving commissions to consumers directly
Senior– No sir. She is new so does not understand the terms ….(How the hell you can let her speak to the consumer)
Me– Oh Great!! Can you explain me how I am getting guaranteed returns?
Senior-Actually sir, the product is giving 9.5% returns and adding loyalty bonus it goes up to 13%.
Me– How do I get this amount?
Senior– Sir, you get it through paid up
Me– But I heard paid up amount you get on maturity. Now I will be paying surrender charges.
Senior-No sir, they both are same option. It depends on company to company. Here you are getting Paid Up+Surrender Value+Bonus after three years. So when can we meet.(Man!!this is the senior guy who knows about Surrender and paid up so well)
Me– Chalo lets meet once and see. But can you name this wonderful Product.
Senior– Sir its Reliance Money Multiplier Plan.
Me– Wonderful!!!!! Give me a call on Monday.
Gets a call on Third day from another number tracing my conversation of first day..
Caller– Hello Sir, my company executives spoke to you about guaranteed insurance plan. What happened sir?
Me– Oh Yah!! But somehow I got busy.
Caller– Sir, I hope you understood the product. I am again giving you features. It gives you 9-10% return but since we give you 1st year premiums 65% as commission the return comes almost to 16% and that too guaranteed.
Me– But Is that the net return?
Caller– Sir, if you calculate IRR it comes to 13% as you are getting Sec80C and Section 10(10D) Benefit.(IRR. Ah!! the same old story)
Me-Great, But I do not have funds now. Can I do it in April?
Caller– We had 200 forms for this offer.150 are already filled so there are only 50 forms remaining and we are getting huge demand for this product. So sir, you have only 3 days to fill this up because the forms then will get filled by that time. (So limited offer buying J)
Me– Oh Oh!!!!!
Caller– Sir, you are working in ………..Why not we meet there and you can call up some of your friends so that the product can be offered to them also. (Ek teer se teen nishane J)
Me– Oh yah yah!!! That will be great. Let me see when can I spare some time. It is such a wonderful product J (Almost made my life)
Can misselling insurance go worse than this? Think and pay attention to calls you receive for buying an insurance product on phone. Buy Insurance cause it gives protection to your loved ones. We will talk about it….