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What an insurance agent says and what he means!

October 19, 2014 13:22 IST

The other day I did a small gig on what a real estate agent says and how you should interpret it... today it is the turn of the insurance agent. :-)

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1. Sir since you have an income, you should have a life cover

Meaning: You have an income, I need to increase my income, so please take a life cover from me and my company only... all others are bad.

2. Our policies combine risk cover along with investments so it is a good option

Meaning: Our investment performance will be dismal so you will tell your wife, 'look we have insurance'. Your life cover will be very low, so you will tell your wife, 'see we at least have investment'. So now you are stuck with a lousy product. Congratulations :-) :-) :-)

3. Buy this policy NOW, it is being withdrawn from October 31

Meaning: The (beep, beep, beep: use of foul words not allowed, you see) IRDA has dramatically reduced the commission in this product so a new product is being launched -- and I will earn a lot lesser if you buy the new product. Alas!

4. Do not buy term insurance, it is not about commission, I get 25 per cent commission anyway.

Meaning: He is being truthful, but 25 per cent of Rs 6000 (the annual premium of a term insurance is very low compared to other products) is only Rs 1500... however if you buy an endowment plan with a Rs 40,000 premium I will get about Rs 16,000 as commission. Same difference.

5. Okay if you MUST buy term, buy term with return of premium -- at least you will get back the amount paid!

Meaning: If you buy term with ROP my commission is assured for the next 30 years because you cannot throw away this product for another 30 years. Actually I am securing my retirement not your life. Poor you!

6. Our company is excellent in the Claim Settlement Ratio

Meaning: I have no clue about what this means, please ask my boss or any insurance buyer who understands what this means and can explain to you in simple terms

7. We will pay an excellent TERMINAL bonus (money that you get when your policy matures), so our ANNUAL bonus (money that you get at the end of every year) that is attached to your policy is low.

Meaning: Our current CEO has made us tell this. However we are now paying a very poor terminal bonus -- you see the CEO who promised has retired and by the time you get the claim you would have forgotten. But hey this is a brilliant sales pitch and worked for us for the past 10 years. But yes, will pay a big TERMINAL bonus in 2044

8. See the illustration it is for 10 per cent and the amount at maturity is Rs 2,12,44,543.55 now imagine (like last year) if the return is 20 per cent -- the amount can exceed Rs 5 crore!

Meaning: Sorry sir, I have no clue how or why I made this statement, but my sales manager asked me to tell this. After all you are also mathematically challenged and will not understand this s#$t, right?

Then why are you bothering with such silly things? Just buy it. :-) :-) :-)

Hope you enjoyed reading this article. If you have similar views and want to share them with other readers :-), Click HERE

Illustration: Uttam Ghosh/

P V Subramanyam