Licence to Mis-sell?
Reliance Life Insurance held an advisor contest for bringing in new business called Fantastic February Contest for two of its products. What is supposed to be an incentive for agents has turned into a weapon to dupe gullible people who trust agents or insurers. The ‘Fantastic Contest’ by Reliance Life is a perfect example. Only two specific schemes—the Classic Plan ULIP and the Highest NAV policies were included in the contest and the incentives for bringing in premiums were lucrative; starting with small cash vouchers and going up to fancy cars such as the Chevrolet Spark, Hyundai i10 and even Honda City. (See table). How can Reliance afford a 10.99% payout (which includes the value of the Honda City) to an advisor when the allocation charge is a mere 2%? Is the regulator unaware? Premium (Rs)
Contest reward
Payout incld. comm.
5,000
Cash voucher of Rs150
3.94%
10,000
Cash voucher of Rs300
3.94%
20,000
Cash voucher of Rs800
4.94%
50,000
Cash voucher of Rs2,200
5.34%
1 lakh
2.5 gram gold
5.94%
1.5 lakh
2.5 gram gold
4.27%
2 lakh
Home theatre
4.94%
2.5 lakh
Home theatre
4.14%
3 lakh
Android phone
4.94%
3.5 lakh
Android phone
4.37%
4 lakh
LCD TV
5.44%
4.5 lakh
LCD TV
4.94%
5 lakh
Wi-Fi iPad
6.34%
6 lakh
Wi-Fi iPad
5.44%
7 lakh
Wi-Fi iPad
4.80%
7.5 lakh
TVS Scooty pep
6.27%
8 lakh
TVS Scooty pep
5.94%
9 lakh
TVS Scooty pep
5.38%
10 lakh
TVS Apache-RTR 160cc
7.44%
15 lakh
50 gram gold
7.61%
20 lakh
70 gram gold
7.94%
25 lakh
90 gram gold
8.14%
30 lakh
90 gram gold
6.94%
35 lakh
Chevrolet Spark
8.94%
50 lakh
Hyundai-i10 car
8.94%
1 crore
Honda City
10.99%