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Suckered: 100% commissions with Kotak Smart Advantage plan


ULIP Advisors just do not know how to stop. Someone who harvested phone numbers from random sources calls me and says he’s from Kotak and selling me a plan that is (Hold your breath) NOT A ULIP. According to him it’s a plan where:

  • You can invest 20,000 rupees now and get Rs. 40,000 in three years.
  • How? You get a 100% bonus after three years in this policy
  • You don’t need to pay any further premiums

Unlike his usual bakras, I asked him for a document, and he sends me the Kotak Smart Advantage Plan.

Point 3 was him bullshitting, of course. It turns out that you have to pay premium for three years, and they give you a 100% bonus. Nice? BUT, and there’s always a BUT, you have to stay with the fund for another 17 years before you can see the money. You can’t withdraw more than 10% of the fund value in any year, and if you choose to surrender the policy before the 8th year, you can see surrender charges from 5% to 1%.

And for the first year, guess how much of your money gets invested? 0. ZERO. Zilch. Not a single naya paisa.

The document says:

The first year premium contributes towards guaranteeing you with the Assured Addition Advantage and is not allocated to the investment funds.

Yay! 100% commissions!

Or, the whole 100% “bonus” is just a load of bull. They take your money for three years, “remove” the first years premium and give it back to you as a bonus. That’s utterly misleading – what is IRDA doing, sleeping?

And why the heck are these products being bought? Please, if you get a call from Kotak advisors pushing this product as a “bonus”, please tell them to take a walk.

Update: Also see Ripul Gupta’s post at MoneyRaam about this plan.


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