Skip to main content

ULIPs Investments are subject to market risks

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

 

 


Consumers, out of ignorance, often have high and unrealistic expectations. When these are not fulfilled, it is sometimes erroneously attributed to deficiency in service, which is legally not tenable. Here is the case of P P Sudhi, who filed a complaint against Life Insurance Corporation ( LIC) in respect of a deposit of ₹ 50,000 in the ' Growth Fund Market Plus Policy'.

Sudhi had taken this policy on December 11, 2007, through her agent. At the time of buying the policy, the agent had told her the amount could be withdrawn after three years.

After this period expired, on November 29, 2011, she approached LIC for withdrawing her money. Sudhi was shocked to learn she would get only ₹ 49,799, despite the amount remaining in deposit for four years. Alleging deficiency in service, Sudhi filed a complaint before the Palakkad District Forum.

LIC argued that being a marketplus policy, it was subject to market risks, and the governing terms and conditions were stated in the policy document. These made it clear units would be allocated to the policyholder's account and the value of the policy on a particular date would be computed by multiplying the number of units with the NAV ( net asset value) applicable on that date.

The NAV could increase or decrease, depending upon the investment performance of the fund. The policyholder would have to bear the risk of market fluctuations.

LIC claimed it had advised Sudhi not to surrender the policy when the market was low. No assurance had been given about appreciation in the value.

Since the stock market was low at the time of surrender of the policy, the NAV was low, which could not be termed a deficiency in service. Upholding this argument, the Forum dismissed the complaint.

Sudhi appealed to the Kerala State Commission, which observed LIC ought to have convinced Sudhi that her money had been properly invested and prudently managed. Since this had not been done, the State Commission asked LIC to pay ₹ 50,000, with an interest of nine per cent from the date of investment till date of refund.

LIC challenged this before the National Commission, which noted the State Commission observations was totally unjustified, as even Sudhi had not complained in this regard. It castigated that State Commission for giving a perverse finding without information on the subject.

The National Commission held the District Forum's order was strictly in line with the policy terms and conditions. A market- plus policy is a unit linked insurance policy which is liable to the vagaries of the share market and subject to risks of fluctuation and variation. There had been no misrepresentation about the terms and conditions. The value had been properly computed.

A loss due to the return of ₹ 49,799 being less than the amount of ₹ 50,000 invested four years ago would not constitute a deficiency in service.

The Commission observed the policyholder had high expectations, and the complaint was made out of frustration at a loss. But consumer fora are bound by the terms of the contract of insurance stipulated in the policy.

Accordingly, the National Commission set aside the order of the State Commission and held the dismissal by the District Forum was justified.

 

 

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

 

 

Leave a missed Call on 94 8300 8300

 

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

 

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

 

Best Performing Mutual Funds

    1. Largecap Funds             Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds         Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds          Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds   Invest Online

      1. DSP BlackRock MicroCap Fund

2.       Franklin India Smaller Companies

E. Sector Funds          Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds      Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds        Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds         Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...
Read more

Avoid NFOs

  Don't get taken in by the flurry of new fund offers. You will be better off sticking to the tried and tested schemes.   For the past one year, to cash in on the bull run in equities, mutual fund houses have gone on a new fund offer (NFO) overdrive. But experts are unanimous in their advice: avoid NFOs . While past performance is not an indicator of how a fund will fare in the future, it does tell the investor how skilful the fund manager is. This crucial information is missing in an NFO. Not only is there no track record to judge an NFO by, many NFOs are similar to funds that already exist. If the new fund is similar to existing funds, you are better off investing in the latter. Around 67% of the new launches in 2014 were closed-end products. Investing in the NFO of a closed-end fund is doubly risky. In case the fund's performance is lacklustre, a closed-end fund does not allow you to exit. Even though closed-end funds are listed on the stock...
Read more

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...
Read more

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...
Read more

RBI frees savings rates in cooperative banks

Tax Saving Mutual Funds Online Current open Infra Bond Application form The central bank had deregulated rates for commercial banks in October THE Reserve Bank of India (RBI) on Monday deregulated interest rate on savings accounts in all state and central cooperative banks, a move that will fetch better returns for depositors. RBI had freed these rates for the scheduled commercial banks in October. In a notification addressed to all state and central cooperative banks, RBI said they are free to determine their savings bank deposit interest rate subject to two conditions. Under the first condition, the notification said, "Each bank will have to offer a uniform interest rate on savings bank deposits up to Rs 1,00,000, irrespective of the amount in the account within this limit." The other condition states that for savings bank deposits over Rs 1,00,000, a bank may provide differential rates of interest, if it so chooses. This would, howev er, be subje...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now