Why ULIP mis-selling has become rampant ?
Why is there so much mis-selling of ULIP? How to avoid this mis-selling? Who should take ULIP?
Have you heard of Post Office’s Gram Sumangal Rural Postal Life Insurance Scheme or POGSRPLIS? Chances are high that you haven’t. However, the insurance scheme launched way back in 1995 is an endowment scheme that gives a healthy return.
For an insurance cover of Rs 7 lakh over 20 years, an individual has to pay a monthly premium of Rs 2,853 per month, which works out to Rs 95 per day.
The scheme is available for two periods — 15 years and 20 years.
One has to attain a minimum age of 19 years to buy a policy while the maximum age limit for a a 15-year tenure is 45 years.
It entails a cashback of 20% of the sum assured payable after completion of 6 years, 9 years and 12 years for a 15-year term. For someone opting for a 20-year term, the cashbacks are at the end of 8, 12 and 16 years.
If someone buys a Rs 7 lakh cover for 20 years, he would get cashbacks of Rs 1.4 lakh after the completion of 8, 12 and 16 years. At the end of the term, the 20th year, he would get Rs 7 lakh minus Rs 4.2 lakh which is Rs 2.8 lakh and a bonus of Rs 6.74 lakh. (The bonus is worked out at the rate of Rs 48, per thousand of investment)
For example, if someone buys a Rs 7 lakh cover for 15 years, he would get cashbacks of Rs 1.4 lakh after the completion of 6, 9 and 12 years. At the end of the term ie, the 15th year, he would get Rs 7 lakh minus Rs 4.2 lakh which is Rs 2.8 lakh and a bonus of Rs 5.04 lakh.