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Why you should not blindly trust your financial agent

Posted: June 22nd, 2008 | Author: | Filed under: Musings | Tags: , , | 4 Comments »

I have learned it the hard way. You should never blindly trust your financial agent. I have two bitter experiences with financial agent and here they are:


I wanted to get a equity linked policy. An acquaintance’s agent suggested me for ICICI prudential’s Life time policy. I had the choice to invest monthly/quarterly or yearly, the money would be invested in equity depnding on my risk appetite (maximizer-all in equity, balancer-50% in equity and 50% in debt or minimizer- more in debt and less in equity) and I can withdraw the complete or partial amount after 3 years lock-in. Needless to say, I chose for Maximizer.

After almost two years when I got to know that I can create an online a/c with ICICI Prudential for tracking my policy and can change the type ( remember those fancy words, min, max, balance ?). I created my account and to my disbelief the fund value was 10% less than what I have paid till now and in this duration, Indian stock market reached to 12000 from 6000 . While digging more into the problem I got to know that the agent irresponsibly chose option minimizer and so, very less portion of my premium was invested in equity.

And due to this fatal mistake this month when I complete 3 years of my policy lock-in period, I just have Rs.1000/- more than what I have paid.


I opened an savings account in HDFC Bank and there an agent approaches me to go for a XYZ policy from HDFC standard Life Insurance. It was also an Unit linked policy and had features more or less the same as above scheme. I decided to get this policy and chose Maximizer.

After two years, when I visited the HDFC standard life Insurance office for an address change request, to my shock I got to know that it was a conventional insurance scheme not an Unit linked and also I could only withdraw my money after 5 years.

I lodged a complaint with HDFCSL insurance for misinformation and asked for policy money refund. After several followups and two months, I got my money back but only the principal amount.

Conclusion: After these two incidents I am more alert about my finances. I inquire a lot before going for any scheme, I try to read the policy terms and conditions (smartly written in a font size of 5-6) and I do keep a track of scheme performance.

On a relative note, I would advise you to stay away from your relatives/acquaintances/friends who are financial agent. I have experienced that they will not give you the complete information about the product, will give you a product most of the time you don’t need because they enjoy good commission on that product.

Experience is a hard teacher because she gives the test first, the lesson afterwards.- Vernon Law

4 Comments on “Why you should not blindly trust your financial agent”

  1. 1 Raj said at 9:21 am on June 23rd, 2008:

    Totally agree with you.. these days,when there are so many insurance products in the market, we need to be very alert on what we buy and be sure that we get what we had asked for.

    I have had similar experience before, but was saved coz i did read the policy document once I got the papers. And used the “freelook” period when the agent had befooled me.

  2. 2 Sudhir Upadhyay said at 3:38 pm on June 23rd, 2008:

    I am also now very careful and do my homework before going for a finance product.

  3. 3 Amardeep said at 11:50 am on June 28th, 2008:

    I have had a similar issue with LIC’s Money plus scheme wherein i was told that it is a Mutual Fund (1 time payment) and lockin for 3 years.
    But i got to know that i will have to pay the amount for 3 consecutive years and only then i can withdraw my Money back.

    I would also advice that dont go for Unit Linked Insurance plans (ULIP) because of less returns and recurring payments for 3 years.

    and Since Market is currently at 13-15 levels its better to invest in Balanced Funds which is 50% Equity and 50% debt instead of only equity.

  4. 4 Sudhir Upadhyay said at 12:17 pm on June 28th, 2008:

    Thanks Amardeep for your suggestions,
    As I have learned few basics in financial investment now, I got to know that ULIP has more administrative charges as compare to Mutual Funds. So, Mutual Funds are the way to go!!!

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