When times are tough, well times are tough. Surely you had not heard of this earlier!!

Well from 1st of September the unit linked plan will undergo a major change in the charging structure. This is perhaps good for the customer, but the sales force is now willing to do anything to show some sales. So they approach existing policy holders and say “Sir, please surrender your old plan….and take a new one”.

Now fairly obviously this is a criminally expensive thing to do. That I think all magazines, newspapers, blogs,….tell you.

I wish to tell you why it is DANGEROUS too.

Most of these juveniles who approach you will first get you the surrender form (a simple letter will do) and a new proposal form. When you fill up both the forms, the existing policy will be surrendered and the new application will still be just a ‘proposal’. Which means if you died between the surrender and the conversion your NOMINEE will get NOTHING.

The other thing that can happen is your health may have deteriorated so your new application could GET RATED UP or worse DECLINED.

Take a case where you have a new policy and you die within 2 months of taking the new plan from a NEW company. That company will put a lot of effort to ensure that they do not have to pay the claim. So your NOMINEE may run from pillar to post to get the claim. You can be sure that the sales guy will be missing.

So, if an agent (Christian name) masquerading as a Relationship manager, brother -in-law, boss….is asking you to switch policies, say ….#@$%^& but no.

However there is an exception to this. If you have a term insurance APPLY FOR A NEW POLICY (pure term not even return of premium) wait for it to be converted, THEN give up the OLD plan. …and pay the premium regularly..