I joined Apnapaisa March 2008 amidst thick of action and my life (professional) changed for ever. My world which revolved around fashion, brands, celebrities, designers and retail took 180 degree spin in favour of loans, credit cards, life insurance, health insurance, estate planning, mutual funds, banking and what not!

This was the time when money took a different perspective for me. I started viewing money from an altogether different angle…dabbling in various financial products for loans, insurance and investments not only as part of research for our site Apnapaisa but also for my personal financial well being. After insuring myself, my first concern was arranging funds for higher education of my fast growing 11 year (then) old daughter Tanya.

I was part of the several meetings which discussed Child Plans and there I understood one thing for sure that there are certain plans which are exclusively for children’s education.  Laden with attractive names and some heavy duty advertising with celebrities endorsing them, these caught my attention too and I made up my mind to invest in one such plan.

Luckily (read unluckily) on one of my rare trips to bank’s branch with my younger one in tow, gauging my vulnerability, agent of bank’s insurance arm showed me some so called good plans for my daughter’s higher education in future.  Endowed with good personality, speaking skills and sound knowledge, agent made inroads with his agenda. I was convinced that if I invest in this plan I will be able to fulfill my dream of sending my daughter to prestigious design school.

I promised him to come back on this next day and left my mobile number with him.  Next morning 10 a.m. sharp, my mobile rang. In the meanwhile I had near forgotten about the discussion. And then began the series of phone calls till I promised to visit him again. As promised I made a trip to the bank branch and agent extended me a warm welcome with nice hot coffee.

He made me fill some forms and explained me the plan where I was to pay Rs. 15,000 every year which will be invested in equity and debt markets (balanced funds) and based on the returns I will get paid after completion of 10 years tenure. Not only this it had an insurance cover of Rs. 3 lacs payable in the event of my death during policy term, more so premiums will also be continued. What else I could have asked for? A small price for my daughter’s future. I went ahead and bought not one but two plans. These were the ULIP policies.  I was very relaxed with my decision. Every now and then I received some sheets from the insurer from which I figured out that I was earning some money on my investment.

Imagine, me showing financial chivalry amidst so many stalwarts. I did not bother to  drop even a word about my plan to buy child plan.

Time elapsed, however my husband coaxed me many times to check how my plans were performing but like all wives I gave deaf ear to it.

Coming back to office meetings, once again I heard that ULIPs are long-term products and these perform best if continued for the entire tenure…so I was relaxed and kept on giving premiums for 3 more years. This was May 2011, the policies  were bought in May 2008. Once again in one such meeting, our CEO Mr. Harsh Roongta mentioned, “Don’t keep putting your good money after bad money”. This was in particular reference to ULIPs which have been facing ire of SEBI, media and customers for quite some time.

I realized it was high time that I reviewed my Child Plans and my colleague Kinnari was very forthcoming in the matter. She started pestering me for details. After dilly dallying for few days I got her the details. I was hoping against hope that my plans were performing…but that was not to be!

To my horror the returns were in negative of near – 12%.
I called my agent to know the reason. His reply was same…it will give returns in the long run. I sternly asked him when share market was doing so well, your insurance company is in profits, and even it has won accolades for its performance, how come my plans are giving negative returns? To this he had no reply. My CEO was right, I was the one putting my good money after bad money.

There was a strong consensus that I should surrender these policies. A day and date was finalized…I went ahead with the surrender plan.  After quite a struggle to locate the office of the insurance company, I reached the window where a young chap welcomed me and popped the expected question: Why do you want to surrender?  As an irritated customer I replied – Returns are very poor and I will not change my decision.

He unwillingly took my policies, did some calculations and giving further blow to my hard earned money, he reduced the amount further stating the reason that you have not completed the lock–in period. Another revelation.

For four years investment of Rs. 60,000 was done in one plan and earned the returns of Rs. 48, 300/- and in the second plan after investing Rs. 60,000/- gave returns of Rs. 49, 445/-. After deducting the surrender charges of Rs. 2415/- and Rs. 2422/- respectively, my net surrender value amounted to Rs. 91,908/- as against the investment of Rs.1,20,000/- thus getting returns in the negative of –15.58%.

With a heavy heart I returned to office next day …my colleague Kinnari added salt to injury by telling me that if I had invested this amount (Rs. 1,20,000) in Mutual Fund arm of the same insurance company, I would have earned Rs. 1,71,120 instead of Rs. 91,908, thus totaling my loss to Rs. 79,212.
“The reasons of this big loss were high policy administration charges and premium allocation charges, besides poor performance of the fund, said Kinnari. I was further surprised that all these years to the best of my knowledge equity market was doing well.

I knew the reality now, my hard earned money had evaporated which I had kept  diligently investing for my daughter’s future. As a mother I felt cheated. Are these plans playing with the emotions of young mothers by capitalizing on them?

But some thoughts constantly linger on:

Young working mothers like me who have invested in such child plans dreaming big for their children will end up feeling cheated like me? Or there will be some recourse to this loss? Where should we go? Where do we invest to get better returns?

Hope concerned people are listening!