This is in continuation of my earlier post in the month of Jun'10 in which I have explained how AVIVA Life Insurance Company had fooled me and gulped in my hard earned money. I had a Life Long Insurance Plan which i surrendered after around 4 years( after 3 years lock-in). I have given 45000 Rupees but recieved only 25000 something after surrendering. The surrender charge of this sort of abnormal and customer-cheating in nature is nowhere mentioned in the policy document. I will explain these facts once again but before that let me tell you what had happened after I have been cheated by AVIVA.

I approached IRDA. What i found is more concerning is that despite of notifying the above incident to IRDA, I have received no response. I have emailed my complain to IRDA but i have got no reply. I have intimated SEBI. I have receive a letter from SEBI that it is not under their purview to look into this problem and they will forward the issue to IRDA. Meanwhile i continue receiving letters from AVIVA after certian intervals that they are looking into my problem. But the matter of fact is i have lost more than 20000 Rupees which i am yet to get back.

If i think of legal actions, it will be uphill task to take on with these companies which i assume have clear backing of so called regulatory bodies (otherwise I would have received a reply as a minimum courtesy).

So where do we stand as deprived and cheated Customers & what can we do?

To start with, let us do the following:-

1. Vigorous campaign against AVIVA stating the fact.Write chain mails, spread the facts in your institution, office, family so that no one gets cheated like me in future.
2. Reject / Boycot all the products of AVIVA.Kick their agents out wherever you see them.
3. Flood IRDA with complaints... if that can make them move and take actions against AVIVA.

Now read my story which i have posted earlier
I have had a ULIP with AVIVA. I had continued it for 46 months and paid a premium of Rs 45000 (Monthly Premium of Rs 1000) . The Policy had a lock-in period of 36 months. Now I have decided to surrender the Policy because of it’s poor performance & excessive fund management charges (a total of around Rs 100 pm which is almost 10% of my monthly premium).
The charges AVIVA deducting from my account were :
• 5 % per annum of Initial Unit value (Units purchased from my first two year’s premiums * NAV)
• 1 % per annum of total fund value (Total units * NAV)
• Rs 75 per month inflated with 5 % pa as Policy administration charges

While surrendering, I came to know that the surrender charge applicable is nearly Rs 20,000 and my surrender value is nearly Rs 25,000.

These people are telling about some bizarre formula which was no-where written in the Policy Document.
The formula is :-

{1-1/(1.05)^n} x Initial Unit value

Where,
n = 30-no of years the Policy is in Place = 30-4 = 26
Initial Unit value = Value of units purchased from my first two year’s premiums
I have enclosed the Policy Terms and Conditions for your reference. Please refer Page 5, Article 15.2 (Full Surrender), where it is written that ‘ The surrender value is equal to the surrender value of Initial Units, which is equal to the value of all initial units less an Early Redemption Charge determined at the time of surrender, and the value of all Accumulation Units in respect to Regular Premiums’

I have repeatedly requested their Customer Service as well their Saltlake, Kolkata Branch Office for a fair deal but my request fall on deaf ears.

Now, how come a common man would come to know that this surrender charge will be Rs 20,000 after reading the above? I have been told during taking the Policy that I will get a reasonable return on my investment after three years. I have been totally trapped, cheated and misled by AVIVA as well as Bajaj Capital, the broker.

I have received a surrender value of around 25,000 Rupees.

Originally Posted by Unregistered

....I had a Life Long Insurance Plan which i surrendered after around 4 years( after 3 years lock-in). I have given 45000 Rupees but recieved only 25000 something after surrendering.
I approached IRDA. What i found is more concerning is that despite of notifying the above incident to IRDA, I have received no response.
.

Hello All,
I am agent.......let me tell you what seems to have happened. The person has done what he should not do and not done what he should have and managed to confuse himself and I guess many more who are not aware.

Clearly the gentleman is beating around the bush, screaming away without wanting to understand, considering it is his savings.
All insurance investment policies are long term and high charges in Ulips was only for first 2-3 years and then nominal. This is why you see lesser than what you put in.
This is to encourage people to stay longer as per plan, when in ending 3-4 yrs or more as per plan they get the charges back as Loyalty Additions.
All the above will be in the policy wording.

IRDA may not have gotten back as closing early is a possible sign of a person laundering black money etc, why else are they closing early and losing benefits. He may have gotten a response possibly if a nicer letter was written.
Possibly in this case it is a genuine issue, but nothing IRDA can do as this complainant is asking for something he cannot get.

What has happened and could have been done:
1) The agent who sold does not seem to have explained properly or the complainant here has forgotten which is usual as also a high amount of miss-selling.
2) Insurance cos are careless in response and at least IRDA should have asked them to explain to complainant when he could have seen a growth as he has closed early and lost, which is an inbuilt penalty.
Also Aviva is known to have response problems, like most INS cos who hire a lot of kids who know nothing in order to save money - are not interested as other interests in mind etc.
3) The complainant should have tried to understand from a mature person whether he should have closed and how not to close the high amount of hard earned money.
4) make sure of no response by flooding IrDA or anyone else and increasing their work load.

DO NOTE THAT A LOT OF AGENTS AND INS CO. SALES MANAGERS TO MEET TARGETS, WRONGLY ADVISE PEOPLE TO CLOSE POLICIES AND TAKE A NEW ONE FROM THEM, RATHER THAN EXPLAIN THAT THEY WOULD BE SEEING GROWTH AFTER THE 5-6 YRS MARK.

SALES MANAGERS IN INS COS ARE THE MAIN CULPRITS OF MIS-SELLING AS TYHEY ARE PAID HUGE SALARIES AND INCENTIVES, BUT PEOPLE ARE ONLY AFTER AGENTS.
EVEN IRDA KNOWS THIS BUT DOES NOT SEEM TO HAVE ADDRESSED IT.

This gentleman, being an agent has written nothing new than that of all agents of Insurance companies like AVIVA speak after you lose your money.

You must have noted the formula which AVIVA has used to derive the surrender charge.Trust me, no where this formula was written in the Policy Document. I do agree that customers like me fall prey to the words of the agents but we are only common man. In every cases ULIP agents use to tell us that after the lock-in is over after three years, we will get 'reasonable' returns if we withdraw money. We will get better returns if we stay invested for longer period.But never ever they tell us that our investment will become half after lock in.

Tell me who on earth would go for AVIVA life long if things are made clear when you sign-up your policy document?
Who on earth would go for ULIPs of Private Insurance Companies like AVIVA unless they are being convinced (by whatever means) by the broker/agents?

The fellow agent has spoken volume of my understanding of ULIPs. I may not understand things better than him as he has been the agent and he must be aware of how the agents of Insurance Companies fool Customers but with the little understanding which I have on ULIP, i do understand that this sort of surrender charge are only means of cheating customer. If the NAV is less, my fund value is half the ammount i have invested, i do not have anything to complain but how can the insurance company deduct nearly half the fund value as surrender charge after lock-in?

I have come out of this plan as my investment would have had zero surrender charge after 30 years!!!! Just think when you are being told to wait for 3 years for a reasonable return and after three years when you go for the money you find yourself being told to stay invested for 30 years to avoid surrender charge. AND THIS IS WHAT AVIVA HAS DONE WITH ME.

So my dear agent, you would have also yelled and screamed and ran like insane if your money was lost, provided you have hard-earned it.

Now for all my friends few advise on my part, I have learnt it over the years .

1. DO NOT GO FOR ULIP. Ask yourself why Ulip if I have the option of Mutual Funds & ELSS. You do not have to pay surrender charges when you withdraw. You do not have to heard the Ulip Agents. Do not entertain Agents. They always lie..only the extent varies. Read every word of the offer documents, search internet to have reviews, consult friends and colleagues, then invest.

2.Try to Differentiate between Insurance & Investment. These needs are seperate and do not put your money together. For your insurance-need, take term insurance. This will cost you one tenth of the premium you pay for Endowment Policies. Invest the balance nine tenth in pure investment products. Even safest instruments like PPF will give you more return. Try the calculation in an excel spread sheet over 20 years period and you will start believing it.

3. Go for products which have some reliable brands attached to it. Like if you go for Unit Linked pension plan, chose from NPS,LIC, SBI Life etc but not the likes of AVIVA.

4. Always check the accessibility to your funds during need. Like I required my investment with AVIVA to be withdrawn for some need and I found it of no use during surrender. Such should not be the case. If you are saving money for some short term objective, make sure that you would not lose a single rupee by fraudulant ways.

5.You yourself will have to help because no regulatory body will be of your help during your need. So last but not the least, DO NOT TRUST INSURANCE AGENTS at the first interaction.

I am a cheated customer, i speak the word in that perspective only.

Originally Posted by Unregistered

Possibly in this case it is a genuine issue, but nothing IRDA can do as this complainant is asking for something he cannot get.

I am stunned by the above comment the Agent/representative from Aviva has written. He/She seems to have already made an accusation without any bias. Well, I have heard a lot about AVIVA, I do not need to read this one sad story of a customer to be convinced how sick AVIVA are. I am an Investor in ULIPs, stock markets and Forex. I gain and loose a lot of money, and pay my taxes too. I will recommend to anyone anyday to invest in SBI life policies. And as a second option you may go for HDFC. Their surrender polices are crisp clear with percentages clearly mentioned and what they say is what they take. I have surrendered many policies because they were either not worth it or I had better ones. Well Mr. Aviva agent, if you are going to say I am laundering money then its best you sit at the International Criminal court at Hauge and judge crimes done all around the world, because they are the only court in the world who are worthless and manipulated.

Thanks for reading.

I have paid Rs. 46200/- in seven years (Rs. 6600/- x 7 years). The fund value as on date is only Rs. 44000/- approx. which is lower than the principal amount. Now i contacted the company to surrender the policy and i was told that I will get Rs. 36000/- only if i surrender the policy. i.e. I will loose Rs. 10000/- Its shocking that instead of getting interest/ benefit on my principal amount I will loose Rs. 10000/-.


Kindly suggest me ............

Originally Posted by Unregistered

This is in continuation of my earlier post in the month of Jun'10 in which I have explained how AVIVA Life Insurance Company had fooled me and gulped in my hard earned money. I had a Life Long Insurance Plan which i surrendered after around 4 years( after 3 years lock-in). I have given 45000 Rupees but recieved only 25000 something after surrendering. The surrender charge of this sort of abnormal and customer-cheating in nature is nowhere mentioned in the policy document. I will explain these facts once again but before that let me tell you what had happened after I have been cheated by AVIVA.

I approached IRDA. What i found is more concerning is that despite of notifying the above incident to IRDA, I have received no response. I have emailed my complain to IRDA but i have got no reply. I have intimated SEBI. I have receive a letter from SEBI that it is not under their purview to look into this problem and they will forward the issue to IRDA. Meanwhile i continue receiving letters from AVIVA after certian intervals that they are looking into my problem. But the matter of fact is i have lost more than 20000 Rupees which i am yet to get back.

If i think of legal actions, it will be uphill task to take on with these companies which i assume have clear backing of so called regulatory bodies (otherwise I would have received a reply as a minimum courtesy).

So where do we stand as deprived and cheated Customers & what can we do?

To start with, let us do the following:-

1. Vigorous campaign against AVIVA stating the fact.Write chain mails, spread the facts in your institution, office, family so that no one gets cheated like me in future.
2. Reject / Boycot all the products of AVIVA.Kick their agents out wherever you see them.
3. Flood IRDA with complaints... if that can make them move and take actions against AVIVA.

Now read my story which i have posted earlier
I have had a ULIP with AVIVA. I had continued it for 46 months and paid a premium of Rs 45000 (Monthly Premium of Rs 1000) . The Policy had a lock-in period of 36 months. Now I have decided to surrender the Policy because of it’s poor performance & excessive fund management charges (a total of around Rs 100 pm which is almost 10% of my monthly premium).
The charges AVIVA deducting from my account were :
• 5 % per annum of Initial Unit value (Units purchased from my first two year’s premiums * NAV)
• 1 % per annum of total fund value (Total units * NAV)
• Rs 75 per month inflated with 5 % pa as Policy administration charges

While surrendering, I came to know that the surrender charge applicable is nearly Rs 20,000 and my surrender value is nearly Rs 25,000.

These people are telling about some bizarre formula which was no-where written in the Policy Document.
The formula is :-

{1-1/(1.05)^n} x Initial Unit value

Where,
n = 30-no of years the Policy is in Place = 30-4 = 26
Initial Unit value = Value of units purchased from my first two year’s premiums
I have enclosed the Policy Terms and Conditions for your reference. Please refer Page 5, Article 15.2 (Full Surrender), where it is written that ‘ The surrender value is equal to the surrender value of Initial Units, which is equal to the value of all initial units less an Early Redemption Charge determined at the time of surrender, and the value of all Accumulation Units in respect to Regular Premiums’

I have repeatedly requested their Customer Service as well their Saltlake, Kolkata Branch Office for a fair deal but my request fall on deaf ears.

Now, how come a common man would come to know that this surrender charge will be Rs 20,000 after reading the above? I have been told during taking the Policy that I will get a reasonable return on my investment after three years. I have been totally trapped, cheated and misled by AVIVA as well as Bajaj Capital, the broker.

I have received a surrender value of around 25,000 Rupees.

Hi People here have suggested to go to SBI Life. Let me tell you it is the worst. ALL ULIPs fleece unaware investers with charges. If any cocky insurance agent approaches you, first ask him to tell you the charges and then talk about the other "so called" benefits and you can see his cockiness vanish in a jiffy. This is because he lives his life from the hard earned premium that you pay , and the moment you take the policy you would become dead wood for him.
Let me give you a sample of charges that SBI Life charges on their ULIP:-

1. Premium allocation charges startin 25%
2. Fund Management Charges which is 1.5% of fund value , so the more you subcribe the more you pay and as the year increases your charges increases. They are worse than pirates.
3. Policy Management Charges (I dont know what other Management charges they can think of)
4. Mortality Charges
5. Top Up Charges
6. Fund Switch Charges .
7. Service Tax for all these charges
Let me tell you after paying 25000 premium for three years and i added up the charges that I paid , they amounted to 22000/- in just three years .
Please dont talk to any Life Insurence Agent, they live out of the premium you pay- and especially dont take SBI Life policies

Originally Posted by Unregistered

Hello All,
I am agent.......let me tell you what seems to have happened. The person has done what he should not do and not done what he should have and managed to confuse himself and I guess many more who are not aware.

Clearly the gentleman is beating around the bush, screaming away without wanting to understand, considering it is his savings.
All insurance investment policies are long term and high charges in Ulips was only for first 2-3 years and then nominal. This is why you see lesser than what you put in.
This is to encourage people to stay longer as per plan, when in ending 3-4 yrs or more as per plan they get the charges back as Loyalty Additions.
All the above will be in the policy wording.

IRDA may not have gotten back as closing early is a possible sign of a person laundering black money etc, why else are they closing early and losing benefits. He may have gotten a response possibly if a nicer letter was written.
Possibly in this case it is a genuine issue, but nothing IRDA can do as this complainant is asking for something he cannot get.

What has happened and could have been done:
1) The agent who sold does not seem to have explained properly or the complainant here has forgotten which is usual as also a high amount of miss-selling.
2) Insurance cos are careless in response and at least IRDA should have asked them to explain to complainant when he could have seen a growth as he has closed early and lost, which is an inbuilt penalty.
Also Aviva is known to have response problems, like most INS cos who hire a lot of kids who know nothing in order to save money - are not interested as other interests in mind etc.
3) The complainant should have tried to understand from a mature person whether he should have closed and how not to close the high amount of hard earned money.
4) make sure of no response by flooding IrDA or anyone else and increasing their work load.

DO NOTE THAT A LOT OF AGENTS AND INS CO. SALES MANAGERS TO MEET TARGETS, WRONGLY ADVISE PEOPLE TO CLOSE POLICIES AND TAKE A NEW ONE FROM THEM, RATHER THAN EXPLAIN THAT THEY WOULD BE SEEING GROWTH AFTER THE 5-6 YRS MARK.

SALES MANAGERS IN INS COS ARE THE MAIN CULPRITS OF MIS-SELLING AS TYHEY ARE PAID HUGE SALARIES AND INCENTIVES, BUT PEOPLE ARE ONLY AFTER AGENTS.
EVEN IRDA KNOWS THIS BUT DOES NOT SEEM TO HAVE ADDRESSED IT.

Hello Mr. Agent,

First of all, I would to thank you for giving the true information. I clearly understand what an ULIP is.. The insurance company uses the client's money to invest in the market and earn huge profits and inturn eat up the principal of the customer and return back only half of the amount. To give an answer to your complaint "IRDA may not have gotten back as closing early is a possible sign of a person laundering black money etc, why else are they closing early and losing benefits." Its purely the mistake of agents like you that they dont disclose the fact that ULIPs are not a good source of investment for common person/people who do not wish to take risk on their principal. In a country like India, I'm sure that very few (except for business minded) would like to risk their principal and keep it locked for longer periods like 10,20 or 30 years. And there is no money laundering here, as I clearly know that once a client enters into an ULIP agreement with the Insurance company, the insurance company invests an amount which is 3/4 of the lock in peroid of that ULIP(beacuse the client will not be able to withdraw amount within this period), in the market. For eg: If a person enters into an ULIP for an yearly premuim of 24000. Then insurance company invests (24000*3years 72000*3/4) 54000 into the market. This amount will not be invested for a period of 20 yrs/10yrs or for matter not even 2 or 3 years, but for shorter period like a day or a week. By the end of the lock-in period the company earns thrice as much as the amount invested in the beginning.

Agents and Insurance companies use the ignorance of the common people, no matter they are educate, uneducated, M.S, Ph.d etc and give a deceiving picture to their clients and make them believe that they can earn gud bugs investing in ULIP.. I'm sure that no agent including you, would have invested in a unprofitable product like ULIP. Even if you have, it would be only for a minimum period of 5 years. Nor, would have you people instructed the clients that it is not an investment(in terms of Indian market), but a bulky lucky draw, where you can earn if the company earns, and you loose if the company looses..

Before you give advice to your clients. I give you the following advices:
1. DO REVEAL TO YOUR CLIENTS THAT IF THEY TRY TO WITHDRAW THEIR AMOUNT BEFORE THE POLICY PERIOD, THEY WILL BE IN LOSS
2. DO NOT PRESCRIBE THIS SORT OF PRODUCT TO A MIDDLE-CLASS OR LOW-CLASS PEOPLE WHO TRULY DEPEND ON THAT MONEY FOR ANY URGENCY
3.DO NOT SUPPORT THE COMPANY AND STAMP DOWN THE CLIENT, IN CASE THEY COME UP WITH AN ISSUE WITH THE PRODUCT YOU MARKETED. INTURN, TRY TO CONVINCE THEM BY CONTACTING WITH THE COMPANY.

I'm 200% sure that none of the agents will follow the above. So, clients should wake up and realise that ULIPs or any other Unit linked product (like MF) is profitable than a Monthly Savings Scheme or a PPF.. CONSUMERS WAKE UP NOW.!!!!!!!!!!!!!!

Hi, friends,
Another big reason to hate and avoid AVIVA products,
I being new to this field and having urgency of taking investment proof, called an agent for purchasing a short term policy. That friendly person from AVIVA managed to took a policy with Rs 30000/- premium pa from me and suggested me to pay the premium for 3 years and then withdraw the policy after 7 years. Accordingly i paid the premium for 3 years, but at the end of 4TH year, without any prior notice my policy was Auto force closed and was given a check of 36000/- giving me a loss of 60000/- rupees........................suggest me friends, what to do....??