[Resolved]  Max Life Insurance (Max New York Life) — Beware of Max Life Insurance (cheating customers)

Address:

Bangalore, Karnataka

(Please read completely to understand "How Max Life Insurance can cheat you in multiple ways")

I fall prey to mis-selling from Max Life Insurance. I had taken a Unit Linked Insurance Plan from Max New York Life (now known as Max Life Insurance) in 2008.(Policy No:[protected] The plan name is "Life Maker Premium". When I took the policy, the following were offered to me.

1. I can pay premium for 3 years and leave the policy
2. I can surrender the policy any time after 3 years without any surrendering charges.
3. This fund is performing best in across all market linked plans, 10% of appreciation to the fund value is minimum(illustrative figures were shown in the policy document)
4. Even if I withdraw 99% of the fund value after 5 years, the insurance coverage remains same till 10th year.

The actual facts about this policy:

1. I have received the policy document after completing the review period(30 days). I have noticed that the policy document differs from what is offered to me. I called the agent immediately. He invited me to the branch office and arranged a meeting with his manager. He convinced me saying all the benefits will not be recorded in the policy document, but I will get all the said benefits after 3 years(locking period). He also showed me the illustrative figures in the document(I was excited to see the profit that I am going to get after 3 years).

2. I paid the policy for 3 years and 8 months, and I see my fund value was 20% less than premium paid. When I decided to cancel the policy, I was told by the customer care there are surrendering charges, if I surrender the policy before 4 years. I have stopped payment towards this policy and waited for 1 more year. I have paid total premium of Rs. 74, 800, and saw the fund value was Rs. 69, 538 after 5 years(33 days short of 5 years).

3. As you see, the fund value was almost 10% less than premium paid. Remember, this is after 5 years! I have decided to surrender the policy as it is not likely to reach the "break-even point" in the recent future. (Why should I donate my money to Max New York Life)

4. I called up the customer care, the agent told me a nice example as a reason to continue with the policy. "You have planted a tree(my policy), now the tree is growing. Please don't cut the tree in between". In reality the tree was growing underground. It has never come out of soil even after 5 years. I stood on my decision to surrender the policy as he have no other explanations or suggestions.

This is only first phase of cheating. Coming to the second phase of cheating. The least you will expect, you will get the fund value while surrundering the policy after 5 years. (Though you lost 10% of your money)

I have confirmed with the customer care as well as from the Max Life branch office that the fund value and the surrender value is same(on 25/10/2013). Which is Rs. 69, 538. Max Life surprized me again! After surrendering the policy, I realized, the fund value credited to my account was Rs. 49, 977. I raised a complaint with Max Life to address this issue. I got an explanation from Max Life saying, there is a clause in the policy document. "The surrender charge is 25%, if Premiums paid are less than four times the ATP paid. 4 times ATP is Rs. 81, 600 where actual premium paid is Rs.74, 800. Max Life intentionally hided this fact from me which caused me a loss of Rs. 20, 000. I could not verify this condition in my policy document as I already surrendered the policy. I cannot verify all the hidden terms and conditions in the policy that's why I checked and verified the surrender value with the Max Life branch office.

Now I have escalated this to Insurance Ombudsman and soon will be filing a case in consumer court against Max Life Insurance. I will update the status(I know, this may take a very long time)

Thought: If an insurance company (Max Life Inusrance) is cheating a customer for saving Rs.20, 000, do you still want to trust them for your life insurance. I am alive to fight against them. Think about the situation of your beloved dependants in your absence. Think twice before you leap.

There are lot of choices for life insurance as well as ULIP plans. Do a market research before you make a decision. Know about all hidden charges. First, the insurance company will take all their charges from your premium.(Fund management charges, Mortality charges, allocation charges, surrendering charges, switching charges are few examples). Only the rest of money will go to your fund. Know what percentage of your premium is getting allocated to actual fund. Trust me, Max New York Life was charging 25% of premium as fund management charges, (along with other charges). My annual premium was 20, 400, in which only less than 12, 000 was going to fund, rest all swallowed by Max New York Life. I came to know about this very late. The Max Life agent may be your friend, your relative or someone who is important to you. You can offer them an expensive gift for not taking a policy from them, you will still save a huge amount and keep the relationship. If you come to know that you got cheated(after few years), you may loose relationship and money. Imagine my frustration against that agent now. Max New York Life now says, I have chosen a poor plan. I would like to ask them, "Do any customer asks for a bad plan for lossing money? Why did "Aapke Sachche Advisor" suggested me this plan?" He said this is the best available plan in the "market".