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Beware of Pvt. Insurance Cos., aggressive marketing and sweet talks
Staff Reporter DIMAPUR, MAR 1 (NPN):
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Published on 2 Mar. 2011 12:39 AM IST
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With privatization mantra, foreign multinational companies in the financial sector have spread thick and fast across the country and Nagaland being no exception.
Tie ups between Indian business houses and foreign companies have provided a new dimension to insurance.
Recently clients of one such insurance firm Bajaj Allianz have filed a case for fraud against the local firm which had duped many customers.
Leaving aside the outright fraud, such firms have taken their businesses very aggressively, employing many smart young and persistent agents.
Such private insurance companies promise the moon such as a “minimum of 50%” over the principal assured amount on maturity.
The firms also promise that a client could discontinue after four of the five installments and yet receive the full principal amount deposited with some percentage benefits. However, the truth is that if a client wants to discontinue after paying four installments, they will be told that they will receive less than the total principal amount deposited after some “deductions”.
If a client had deposited a total of , say Rs.8 lakhs (Rs.2 lakh each year for four years ) and hoped to get back the full amount without depositing the remaining installment ; a hitch will come up. The insurance company agents will disclose that since the client was not going to deposit the final installment, he or she will not get back Rs.8 lakh deposited but hardly Rs.7 lakh of total deposited principal of Rs.8 lakh. Public have to read the fine prints (which can be read through magnifying glass)to understand the implications of being tempted or lured into thinking he or she will earn “a minimum of 50%” of the principal.
Even if the client deposits the entire amount, the catch is that the 50% will depend on prevailing market and could even turn out to be lesser.
The point is that insurance firms take your money, invest it in other business, make profits and give you a pittance and that too subject to “market conditions”.
It is always better to invest in bank Fixed Deposits and get back your money with interest instead of gambling it away with private insurance firms offering catchy bonuses.

 
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