Home > Ideas > How I purchased Insurance – Part.1

How I purchased Insurance – Part.1

Last year I purchased a Term Insurance Policy.

The philosophy behind this purchase was conversion of my high premium policies (with term-end profits) to low cost (pure risk-cover) policies. In the past I (like many employed people in India) had used insurance policies as a means of savings. They gave reasonable returns and tax breaks too. There were very few other investment options that offered fair returns at such low – risk. This was in the 1980s and we weren’t used to investing in Shares and Mutual Funds yet.

But today, with a wide – range of attractive investment options in the market, it seemed wasteful to park precious money in an insurance policy. So, my objective was to get adequate cover on my life at the lowest cost and invest the surplus funds in instruments that gave better returns.

Most of my insurance policies were booked through one Insurance Advisor, who, over the years, had become a friend. He represented the Government owned Life Insurance Corporation, which had sole rights to sell insurance in the country till the sector was opened to private players in the 1990s. My friend, in the meantime, had added new lines of business and wasn’t focusing much on his Insurance practice.

So, for the recent purchase, I decided to try a new Advisor (let us call him Kumar) – he represented one of the biggest names in Banking and Finance and had all the makings of the archetypical insurance  sales guy – a confident swagger, the gift of the gab, all the answers and very few questions!

It had taken me a while to decide on the requirement and the value of the cover. I did not wish to put all my eggs in one basket and hence only one portion of the total cover was awarded to Kumar.  He had been doing the rounds for a few months now – and it was this persistence that prompted me to give him the benefit of my patronage. That one quality swung the balance strongly in his favour in spite of everything else he did.

Kumar had tried convincing me to go for a policy that offered Health Care benefits in addition to the life-cover; but it meant that the policy would cost more and the health benefits came with many tricky clauses. I decided to keep it simple and opted for a pure term cover, my original specification. The health insurance cover was purchased later from a General Insurance Company; it did not have that many tricky terms and it offered cash-less treatment benefit in many good hospitals across the country.

After that Kumar tried convincing me to buy a policy with Education Cover saying I can use the accrued funds for my son’s higher education needs. This again was beyond the scope of my need.

I wasn’t annoyed with Kumar’s attempts to sell me an over-specified policy. It amused me. He was playing the True Blue Insurance Salesperson.  It was for me to draw the line and tell him what was required.

So, after many trips when I finally gave him the green signal, he was relieved and pleased. I could read the unspoken thought running in his head: “Phew! The man is finally talking business!”

Kumar was in my office before I could say “Term Cover’ – he handed over the Proposal Document for the relevant scheme and an application form was fished out his portfolio bag as soon as I offered him a seat. Kumar gave me a lengthy discourse on the documents to be submitted and the next steps involved before the policy came into force.

I checked the premium amount quoted and said that I can go a bit higher; his eyes lit up once more – he asked how much and I suggested a 50% increase in the cover. Kumar had given me a scheme for a ten year term and I told him to double that too – which meant higher premium and higher commissions for him. I wasn’t done yet! An Accident Cover rider was suggested and he slapped that on too.  Did I catch him singing “Jingle Bells” under the breath? Probably not! But one could safely say that he was pleased as punch.

The premium amount was paid and I gave him all documents save one, which was to be delivered at his office the next day. He would have collected it from my place, but I decided to pay him a visit. I wanted to assess the post-sale service quality of this insurance company and the quality of service offered by my advisor – the second one to help me decide whether Kumar is a good long- term bet as a Consultant. That will be the subject of the next article.

In the meantime you can tell me how reassured you would feel after such a sales encounter.

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  1. February 24, 2012 at 12:43 pm

    You are a dream client.

    So far…

    • JayadevM
      February 24, 2012 at 1:32 pm

      Ha! Ha! Thank you, Shoba … for reading the article!

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