Let me tell you things that I have heard from Journalists..

Subra….

• A retired person does not need life insurance
• Agents should be blacklisted for lapsed policies
• If disclosures are better people will buy more sensibly
• People do realise that they have bought a bad plan
• Term plans are 4% of the total insurance in India – when I asked ‘of the sum assured or the premium’ – he/she had no answer
• Concept of Mis-buying is WRONG. Why would a client MIS BUY?
• Financial planners understand all the products.
• A financial planner will not mis-sell a product because he gets no commission on that product.
• If a client does not UNDERSTAND the product, it is the manufacturer’s fault
• An investor buying a life insurance plan needs protection – a person buying a derivative UNDERSTANDS FnO.

The problem in having a good memory is that you remember the Journalists who were rewarding the life insurance companies in the early 2000 and are now horrified that there is so much mis-selling.  I do think the magazines or the channels find it easy to thrash the ‘Agent’ – he is the weakest link, does not have advertising or PR budgets, and does not matter.

Look at ANY investment product. Look at any risk product.

All are products ‘created’ by a manufacturer. Almost all products have a regulator supervising it. Irda approves a product, Sebi does not specifically approve every product.

Every product has a role in society and in your portfolio. It is for you to go and understand how the product works. If you think journalists understand how a product works you should see some of their portfolios. It stinks. You should subtly ask them about their trips to Goa, Shimla, Dubai, Uzbekistan, London, Switzerland,..and the $ 250 per day allowance that they got. If you have journalist friends you should ask them ‘why are all ulips bad’ and ‘why are agents responsible for mis-selling by the Managing Directors who made the product and the Regulator who approved the product paragons of virtue’. You should ask ‘how come today if there is some doubt about some regulator ‘clarification’ there is no journalist who has seen/ read / understood them.

You should ask them –

• if all endowment and ulips are bad, why is the regulator still allowing them to be sold?
• why is an agency made to look so lucrative but has only a 5% persistency ratio?
• why are all journalists asked to handle banking, mutual funds, insurance, brokerage?
• even the agent (yes yes class 12 pass) has to pass an exam why no exam for journalists?
• Has any journalist ever spoken about the derivatives of the ‘term plan’?
• Have they produced a checklist on ‘how to buy term insurance’?
• Have they asked IRDA why they did not stand on the shoulders of SEBI and learn ULIP regulation?
• Have they done articles on inter regulatory rivalry?

Let me stop before I get sued…