I don’t want to convert this blog into a rant blog (I don’t like this, I hate that) but I feels this is important and I should write about it. I am also hoping that this blog post will rank for ICICI Prudential scam and get some visibility through search engines as well as in social media as more people need to get aware about the modus operandi of the insurance agencies affiliates to banks and how they are sucking innocent people for their commission.
Background – Back in 2009, I was looking to invest some money in mutual funds, I have savings account in ICICI so I went to the branch and talked to them as I have limited knowledge about investing. After some discussion, the ICICI representative sold me ICICI prudential policy saying this is like mutual fund with tax saving. I was very clear to the bank agent that I am not looking for ULIPs and do not want any locking period and hence want to go for mutual funds. Since I needed the tax saving too so I went ahead and purchased it. Just after this, I had to leave the city and I came back after 1.5 month and saw the papers sent to me by ICICI.
What ICICI prudential didn’t disclosed at the time of purchase was the 3 year locking period, the policy NOT being anything remotely close to mutual funds and after 3 year, you still have to keep on continue the policy for next 22 years! if I terminate the policy after 3 years, I will get 92% of the total amount. When I checked the value of my investment in november 2012, the “fund” has performed very badly and it is giving negative return (in 3 years, the value has become less than the original value). I am least concerned about the negative return, what angers me is the way ICICI prudential sold the ULIP policy by conveniently hiding some of the most important terms and selling it in the name of Mutual funds.
What Actions I took so Jan 2010, when I saw the exact terms, I immediately talked to ICICI, after so many emails and phone calls of explaining, I was told that they allow you to cancel the policy in first 30 days (I wasn’t there and didn’t got the papers). I told them that my concern is how ICICI prudential hide the facts and sold me the policy and not what is mentioned in the policy “booklet”. I was told that they won’t do anything.
Since ICICI prudential had pretty much told me to shove if off, I wrote my complaint to RBI through their site about how ICICI prudential agents are selling life insurance policies by hiding the major terms and conditions and sucking people in. Again, this started barrage of emails and phone calls, though this did started a formal inquiry. I got a call from ICICI regional manager, they apologized and said the agent will lose his job if I don’t take my complaint back. I do all my banking through ICICI and is satisfied with the bank and certainly don’t want anyone to lose their job so I took my complaint back in the hope that I will be done with this in 2012.
November 2012 so here comes November 2012, I thought finally I am done with this after 3 years and when I tried to cancel my policy, it turns out that I will be getting 92% of the total fund (which is already less then the original value because of poor performance of the “market”). This is something which was never told to me so I again called ICICI prudential support and send them emails, again had to spend hours explaining the matter to clueless agents and eventually nothing happened. I think they just closed the matter without even informing me. I am still getting calls from ICICI prudential to pay the premium and the moment I tell them that what is going on, they hangs the phone!
I think it is a dead issue, I have already spent lot of time on this and I feels my time is way too valuable to keep on sending mails to ICICI and to talk to them, I have learnt my lesson to never trust Indian banks as far as investment decisions are concerned. I am just wondering, if an educated guy like me got sucked into this, what is happening with the 40 something uncle/aunties who have very limited knowledge about how ULIP policies and mutual funds work.
I hope more people in India understand that, you can not trust your banks (nationalized or private once like ICICI, HDFC, Axis) as far as investing money in mutual funds, ULIP or any such policies are concerned as there is serious conflict of interest here. The bank agents get commission on every sale they make and have sales target which also push them to sell the policies at any cost. DO NOT get sucked into this, ask your friends or people who know a thing or two about investment and follow their advice.