A Case Of My HDFC Life Insurance Policy
I have come up with a peculiar case of non-compliance with accounting principles in my Life Insurance Policy with the HDFC Life. The straight and simple clarifications given to me by the Company have perturbed me and I started wondering if this was one of the major ills in the recent years in the financial sectors and banks. I have taken up the issue with the Company as well as I had approached the Ombudsman. But so far I haven't got any satisfactory clarification about it. So while I am dealing the matter with the concerned offices, I thought I will put it across to my viewers as well to see if I am able to put across my views to them and to be of a help to them if they too have faced such issues. Here's the gist of it (extracts from my emails):
===> "It's been over six months and you haven't clarified about the maturity amount not matching up to proper Standards of maturity i.e. :" {here I am explaining the expected standards of maturity for a layman}
" A normal Life Insurance
Policy pays a maturity amount of sum assured plus a total of annually
accrued commissions. So the net payout is more than the sum assured
amount. So a five lakhs policy would take in payments of 2.5 lakhs and
payout 5 lakhs plus commissions. But a Max NAV based policy is
fundamentally an improved version over the normal policy and hence it is
expected to give more returns than a normal policy because it is likely
to accumulate more earnings, and consequently commissions." {So a Standard of Maturity payment for a 5L policy with input of 2.5L is 5L + Bonus Amount. So my 2.5L gives me back up to 6L to 8L in a normal policy. And since a Max. NAV policy version is an advanced version, so it should pay me about 8L or more. This is subject to market conditions, but Market has increased maybe by 3 fold or more during the past 10 - 11 years. So wouldn't my policy of 5L generate anywhere about 15L or more?}
"But in my case about Policy Number ****9714, the input money is INR
2,50,000, but the maturity amount is only INR 97660. If I add the
previous partial withdrawals of INR 25000 and INR 15000, then the payout
amount becomes INR 137660. If I add another withdrawal of about INR
113000 as stated by your company staff over phone, then the total payout
becomes about INR 250660. Compare this to the expected payout amount of
INR 5,00,000 plus commissions." {If I go by my memory, I had only about 40K available for partial withdrawal of which I withdrew 25K and later on I withdrew another 15K. But if LIC records are showing another about 113000, then my bank records would show it. Anyway, assuming that also is correct, even then, the total payout to me comes to only 250660. Which means, my 2.5L investment has matured into just 250660 over ten years!}{compare this to above mentioned Standards of Maturity}{Herein I would like to mention that the theoretical amount of about 15L will reduce due to operational lapses as well as due to reduction in Capital due to partial withdrawal. But still I can safely expect the total maturity amount to be anywhere around 8L or so}
"Hence, I can
visualize a gross misappropriation of my funds or maybe fraudulent NAV
generation resulting in non-payment of 'Full Maturity Amount' as per
proper standards of maturity of an insurance policy." {This I am pointing out as a probable cause of my actual maturity amount not matching up to the Standard of Maturity of about 8L or so}. {But Company people are not willing to understand this cause and instead just quoting their NAV as the standard of maturity amount payments}
{This means the NAV calculation and accounting methods adopted by the Company are wrong and falsifying . Such misappropriation of funds must be making them a cool 10L for every policy of 5L which they could be dividing amongst themselves}
"I had lodged a complaint immediately upon payment of only INR 97660 to
me as a maturity amount and repeatedly reminded about it in further 'HDFCSL=********'
reference emails, but neither have my doubts been cleared nor my funds
have been paid out to me yet. I had also visited the branch office in ***** (locality) but even that was also not satisfactory."
{It's not that the Company is not listening to my complaint. They are, but their straight and simple modus operandi is to quote the NAV and multiply the number of units with the NAV to get the resultant maturity amount. Nowhere are they concerned that they could be conducting a gross accounting error or conjoining up in a fraud} {Secondly, the executive Officers who show up their faces or reply on phone or over email are overconfident in quoting the NAV. They are least bothered to suspect the misappropriation of funds and raise up the accountants to recheck it and furnish a detailed account of investments, profits and losses}
"I request you to give to me a written reply about my fund's
calculations and the net maturity amount due to me as per your
calculations." {not calculations of my funds and yearly profit/loss accounts have been attempted. Only, yearly NAVs are quoted which remain almost stagnant, no matter if the markets increase to 3 fold over the years and they fluctuate grossly up and down even ten times in a year!}.
" As such, I also wish to approach the Grievance Redress Officer of your
Company if I am not satisfied with your reply-back. So, I request you to
give to me such contact details." {still waiting for such entity's address}
"Here, I wish to also inform you that failing in my attempts with your
Company's Officers, I will be lodging a complaint to the Ombudsman's
office." {They need a formal signed and documented complaint. They don't act on email copies. So I have to wait for entity's reply, attach a copy of it to my complaint and then it will be acted upon.}
"Lastly I would like to quote my first complaint email to you about this matter:
As per our telephonic conversation and further SMS
messages, I have sent my documents to you vide the below attached email.
But it seems you have neither updated my address in my account nor have
you rechecked the policy amount due to me.
Under simple consideration, I have paid INR 50000 annually for five
years from 2013 to 2017 (albeit missing out on proper scheduled dates)
which
makes up a sum of INR 250000 (two lakhs and fifty thousand) whereas,
you have paid back to me partial withdrawal of INR 25000 and INR 15000
(total 40000) during policy term and INR 97660 upon maturity. This makes
a total of only INR 137660.
This is
completely absurd considering that usually a Life Insurance Policy pays
back Sum Assured plus Bonus and theoretically and in principle, an NAV
based policy of Highest NAV should perform better than traditional Bonus
oriented policy. This means that my policy should give me returns
better than INR 500000 and Bonus.
Hence your
policy is highly erroneous in calculating my maturity amount. NAV is
calculated and maintained by your Company and by your experts. If we
compare the markets, it has grown immensely over the past ten years
(mutual funds are multiplying the money five to eight times, i.e. 2.5L
would be 12.5L to 20L depending upon the MF) whereas your policy is
giving a negative trend. This shows there is some big error in your
compilation or is it that your Company is involved in some scam or
fraudulent misappropriation of funds?
Hence, I
request you to recheck your system and confirm to me if everything is
correct in your calculations. If possible, also give to me, e record of
such calculations.
Also, let me know, the contact details of Ombudsman or your higher Authority in this matter."
{This is the copy of my first complaint with the Company and attached as quote in my latest complaint as above}
So, this is the case with my Life Insurance Policy and I am sure many other people must be facing the same difficulties. Could this be an issue with various other Companies as well? Could it be the underlining reason behind many bank scams and financial scams experienced in recent years? Could it be another modus operandi of depriving people of their money and accumulating wealth in own hands to boost own progress and own Companies?
If I get any replies or comments, well and good, but in any case, the readers can think about it for their use too. IPYadav
