Hi Team,

I have Birla Sunlife Flexi Life Line policy and policy number is 748185.
I was going through all terms and conditions and found some terms that were not making much sense.

I found that in circumstances of my death, the surrender value will be higher of Actual Fund value, Minimum guaranteed fund and "Sum Assured".
Now my understanding is in this case my insurance charges should reduce with the increase in actual fund values. But the policy documents does not state anything like this at all. I do not think this should be inline with IRDA guidelines.

Just to make myself more clear, If my current fund value is 4 lacs, and sum assured is 5 lacs, I should be paying insurance charges only for 1 lac amount, because remaining 4 lacs are already secured through my fund value. Right??

I have dropped same query in a mail twice to customer service of birla sunlife, but no one has responded yet. I forwarded this mail to Medha Raole, a manager from birla sunlife, but she also did not respond.

Could you please escalate this issue and check if birla sunlife policy is following all IRDA guidelines.

Thanks,
Ritesh

Dear Friend,

I am a co-consumer and i have been reading various complaints on ULIP for my study.

I would say that the view given by you (that insurance charges should be only on the balance 1 lac) is very innovative. Infact, it is logical and what should have been. But it is not so. All the companies charge in the same way. The mortality charges (cost of providing assurance) increases with your age but does not decrease with increasing fund value. In case of death of the insured, (in most of the plans) the company pays out only the insured sum and gets to keep the units.

The insurers and agents may argue that in that case also you get more than you have paid. But the insured sum is paid out of a fund made from mortality charges based on statistical calculations that the company pay out only what it recieves. (for example it collects Rs. 100 each from 100 lives insured and pays Rs. 10,000 to one of them on his/her death) An actury can explain this well. (try reading wikipedia on 'the law of large numbers').

Thus, ULIP is not such a good option after all. Message me and (I think) I can suggest you a better strategy. Anyways I would say you have a (financially and mathematically) sharp brain.