Investor’s Query: Kindly advise me about Zurich Vista and Zurich Future Plans. If good which will be suitable for me? If I invest monthly in Zurich Futura for 10 years, even if it is an insurance policy, after ten years along with insurance benefits up to 96 years I WILL GET SOME MONETARY BENEFITS also?
Mr. Gerard Colaco: Names like Zurich Vista, Zurich Future Plans and Zurich Futura are mere meaningless terms. I have gone through the brochures of Zurich Futura & Zurich Vista. I will start with Zurich Futura. This is an investment-linked insurance product. The four worst insurance products are endowment plans, money-back plans, unit-linked insurance plans (ULIPs) and pension products (including annuities). The Zurich Futura is a ULIP.
It belongs to a category of products which insurance insiders themselves describe as “poor insurance, poor investment” products. One of the reasons that they are of very low quality is their enormous costs. We become victims of these policies because we are too lazy to read the policy documents.
Please go to page 13 of the Zurich Futura brochure. Point No 7 deals with the policy charges. Point 7.1 clearly states that the entire premium paid by you during the first two years will go towards ‘setup charges’ for your policy. In other words not one rupee of what you pay in the first two years goes towards investment! Does this sound attractive to you? There is worse to come.
From year 3 to year 9, 7% per year will go towards charges. Not satisfied with this level of robbery, from year 10 onwards, 2% per annum will go towards charges. Once again I ask, does this sound attractive? If you think that these are the total charges, you are sadly mistaken. This is only the first of many charges.
Point 7.2 is laughable because the headline reads “benefit charges”. Any primary school student of English will tell you that the words “benefit” and “charges” appearing together are a contradiction in terms. Either there are benefits or there are charges!
Point 7.3 speaks of the policy administration charge (PAC) which is deducted each month from your policy. The PAC is US$ 7.5 per month. Are you willing to pay Rs 472/- per month for this policy, over and above all other charges?
Point 7.4 speaks about the annual fund management charge. I cannot comment on this because the fund management charge has not been mentioned. However, point 7.5 is truly horrible because in addition to the charges contemplated by point 7.4, 0.75% per annum is charged additionally for nothing more than putting your funds into other existing funds of Zurich!
I will not comment about points 7.6, 7.7 & 7.8, but point 7.9 requires a comment. There is a yearly trust charge, over and above all others, which amounts to US$ 375/-. Are you willing to pay Rs 23,625/- per year in addition to all other charges for your policy?
In short, my comment is that the Zurich Futura is neither insurance nor investment. It is theft.
I now come to the Zurich Vista. This too is an investment-linked, poor-insurance, poor- investment product. Unlike the Zurich Futura, it is not transparent. The exact charges have not been mentioned in the brochure. However, on page 10 it is stated that the Zurich Vista will charge a fee for setting up the policy and subsequently on every payment made by you.
In addition, there will be an ongoing policy management charge, an additional fee to administer your policy, a fee for any additional benefits you may avail of. Each fund that you invest in has its own management charges attached, which will be in addition to the charges mentioned above. Finally, there will be a charge for Zurich Trust Limited acting as your trustee.
I never cease to be amazed at how investors continue to choose such rubbish despite the thieves in the insurance industry informing them in writing, in advance about how they are going to be robbed. Don’t send me any more queries about such products again. I have warned you once by this email and this will be the first and final warning.
I am definitely not prepared to advise you in future for such products. This is because you will constantly be bombarded by the mad dog sales personnel of such insurance companies and will be constantly sending me these queries. Each query will require me to spend considerable time reading and replying to it. I am not interested in going through such garbage and analysing it. I have far better material to read.
For any client, of our office, I am prepared to read and respond to such queries once. But only once.