I have had calls from two reputed "aggressive" investment companies. One of them offered more then Assured wealth Plan while other offered a guaranteed Double return Plan. 140% returns on first Investment/Premium, Almost double the amount in 3-5 years, etc are some of the features mentioned by these agents. A guy named Shivam from Mumbai spoke to me about it. Told me of very lucrative returns. I was surely interested. When I asked him to send across the details on mail - he was not ready. He told me name of the plan details being on internet. I did not find it on their website. I looked for it - all they have is a similar named plan whose returns do not match with what was told verbally to me. There are no details/brochures of "Assured Wealth Plus Plan". The idea of these agents is to tell all these things verbally and make a customer agree to it. Then send an executive. As they do not give you anything else at that point in time. Later on when you get the actual policy the fine print negates or imposes weird Terms & Conditions, restricting your returns significantly. When I asked him to write all these things on his company letterhead for me before I invest my money, he was mad and started yelling at me. He started saying that I should also give in writing that I will invest money, once he puts this thing in writing. His agent has not showed up yet, till date.
Today morning a lady from the other aggressive reputed company called, with the similar features. When I asked her for the website URL or email containing these details, she was reluctant. She said they have guaranteed 7.75% returns. It had medical and life-insurance included in the policy. I asked if the returns are tax-free and she said yes. Then I asked her if it is "Tax-free" or "Tax-exempted" which she could not answer. She did not know the difference. Later when she told me it was under section 10-10-D, I checked to see if she knew the limit of exemption, which again was a bouncer for her. Again when I switched to topic to website URL or email, she started blabbering at which I disconnected the phone.
Bottom-line: None of these people are ready to give anything in writing. Ask for it and you will know their worth.
On a little more inquiry with close friends working in the same field, I got to know that these agents of these 2 companies do this kind of overselling, to meet their targets. They do not care about any commitments to the customers. Once the customer signs up for a policy, the Bank/Insurance Agency and customer have to sort it out. They get their commission and are out of the picture. One of them agreed, off the record, that the banks are aware of these kind of marketing techniques but care more about the revenue, not the ethics.
Most of them claim it to be an Online policy, closing in a few days. Most of them do double your wealth but after a duration longer than a Fixed deposit giving you same returns. Interestingly the non-aggressive players like LIC, SBI & HDFC do not promise such returns. They maybe conservative in their projections but have lot more clarity.
All of them talk about return projections of 12-15% p.a., way above the IRDA approved limits.
Most customers never realize this till maturity dates of their investments i.e. Many years later. Some even realize this as soon as they get their policy & they read its fine print. Till then they are already bound by the contract. All those having policies from such players would have realized the same by now. With most of the administrative, allocation, insurance charges are deducted from the very first premium, you cannot get anything by canceling the policy in the first 3 years. After that till the 7th Year, you get upto 30% of the premium paid, which generally is the return on the investment. You never get the principal back. As most of the policies are market/unit linked - these institutions also control the NAV as well as allocation charges. All of them make merry at the customers cost.
Please be careful when investing in any such policies.
Free ki advice hai, leni hai to lo varnaa jaane do ... ;-)
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