Beware of This Banking Scam — ULIP Policies

TL;DR: Bank sales guys sold ULIP policy with misleading higher returns and hid all the charges. This is how they are trained. I cancelled the policy and got my refund.

Upon going deep, I got to know that some charges were charged twice that makes this policy a scam.

Bank employees selling policies for higher commission and trips.

I didn’t know about this until I was victimised. My financial knowledge was not strong so at that time and I didn’t know life insurance can be used as investment instrument.

I visited ICICI bank one fine day for investing some amount in FD. A bank employee who earlier helped in opening a bank account told me to invest in a policy which was the best for me. I thought to give it a go and he started explaining things to me.

He was basically selling me a ULIP policy but he never mentioned it was a ULIP or life insurance product. He was only calling it by its product name which was ICICI Elite Wealth II. He told me about higher returns of 13% which was certainly better than fixed deposits (7.1%). He told me about the benefits of having this policy as it’s got Section 80C rebate in income tax for upto 1,50,000 INR. He even said that he himself has taken this policy.

I was not convinced initially as he was only explaining things by writing on plain paper. I asked about its surety of 13% return and whether it’s fixed, I was basically comparing it with fixed deposits. I asked for the policy’s brochure which he printed and called his senior as I was not convinced by him.

His senior enters, He explains same things with butter in his words. He also told that 13% is minimum and you’ll enjoy when the returns are ~18%. He also told me that I’ll get 10x life insurance cover with this policy (never told me that this is primarily a LIC policy). He introduced misleading terms like wealth booster and loyalty additions and what not.

He told me how most of the NRIs prefer this policy and one of his clients recently got this policy for Rs. 10 lakhs premium and he wants one more for his wife. I don’t know the authenticity of his words here, might be true but I assume all that as lie for selling me a poor policy.

I was a fool for falling for a minimum 13% return. I got that policy and on that day I was happy to invest in that policy than FD.

While filling the form, Mr. Ankit wrongfully filled my form. He wrote my annual income as 20lacs where’s it’s less than 6lacs. Upon asking why, he told it’s just a formality and it won’t affect you. But later I figured out that It requires my PAN number so It might put my ITR statement under bad light.

After around a week, I got my bond. In that bond, a big chunk of my first premium were deducted. Upon reading the bond, I got to know about a number of charges attached viz. Premium Allocation charge, Mortality charge, fund allocation charge and service tax.

Those bank employees didn’t mention a single charge to me. Not a single one. Only told me false, misleading numbers. I was shocked and fixed a meeting with both of them.

I: You didn’t mention these charges, why?

Ankit: *looks at his colleague*, we didn’t mention these charges? Oh, perhaps we overlooked these charges. They are just nominal. Like 5%. So 18%-5% = 13%. You’ll get 13% return per year, minimum. Don’t worry sir, you are now elite customer of this bank. We don’t offer this policy to just anyone.

I decided to cancel the policy anyway as I didn’t was a shitty policy (as I read many reviews on internet). He told me there is a problem in cancelling the policy. I asked what. He, pointing at his colleague, said, It’ll affect his portfolio. I was like, Am I responsible for this? He also told me that I was not trusting him. I told him why should I trust you when you hid all the charges.

According to IRDAI rules, bank employees are not allowed to demonstrate more than 8% returns to clients. Thanks to IRDAI, Ulip policies have free-look cancellation period of 15 days.

I finally got my policy cancelled and got my refund. Thankfully, I got 102% of my premium and all because of market at that time and thanks to IRDAI policies, I got refund of charges too.

Meanwhile, I was also communicating to ICICI Prudential via email regarding the policy and bonds. While discussing things, I got to know that Bank actually charges service tax twice, which makes the policy a SCAM.

Upon asking for a breakdown of charges, I got this reply from ICICI bank corporate office.

My reply to this mail:

And then I never got a single reply from Mr. Ravi Ranjan.

I didn’t get any reply from Mr. Ravi but some other office replied which was quite unacceptable. And this is how they sum up the scenario when they didn’t have a reply.

Not just the sales guys but the whole system is wrong. This is the bad business tactic I experienced recently. And the sales guys are trained in such a way that they’ll always hide charges, mislead with higher returns, try to make personal relations. And what do they get for this? A higher commission compared to selling mutual funds and trips to places.

Moral of the story: Never ever trust your bank employee when it comes to investment. If you want to invest your money in a good instrument, pay a financial expert, he’ll suggest what is good for you.

Going anonymous to hide my identity. But this needs to be known by many. If you don’t know bank guys sales tactics, you’ll be fooled. Thanks for reading this long post.

Read people’s complaints about ICICI Prudential policies and how they cheat: ICICI Prudential Life Insurance Customer Care (So it’s not just me).