Max New York Life -- Correct Advice?

There are about two dozen or more life insurance companies operating in India at present, competition is stiff; every life insurance company needs to stand out of the crowd by making a differentiated offering to the consumer. But this difficult, that is because there is little or no significant difference among the various plans/products offered by various life insurance companies.  Max New York Life has upon an idea to be different from others and that is by showing that there insurance advisers do business ethically by putting the customers’ (or prospects’) interest above their own unlike others.

Max New York Life has launched a ad campaign through which it cautions people against wrong advice given by life insurance agents in order to grab business. It is trying to show that insurance agent generally tend to misguide prospects by making false promises and also by making them take more insurance than
they really need or can afford. In sharp contrast the agent (or adviser as the company chooses to call them) from Max New York Life is shown as a principled person who does not fall to temptation (personified by a devilish looking character in the ads) and who advises his prospect correctly, that is because for the Max New York Life adviser the customer/prospect’s interests comes first.

In one of their ads the prospect asks the Max New York Life adviser if there a chance of his money doubling? The adviser replies by saying that insurance is a long term saving and that the money does not double overnight, returns are good and you also get life cover. Does the adviser correctly advise the prospect here in this ad? The answer according to me is NO! Any kind of insurance is primarily taken for covering a risk (life in this case); it is a contract to provide compensation for loss, damage, or death. It is primarily not a savings instrument, yes there is some saving in life insurance but that is incidental and there are better alternatives available if one needs to save money. The ad says that the returns are good, but what exactly is good in this case? These days unit linked policies are becoming popular; these give you the benefit of risk cover as well as return on investment (ROI). However savings and ROI are only the secondary benefits available to the person taking a life insurance policy, the main benefit is life cover.

It is interesting to note that the ad treats life cover as a secondary benefit by relegating it to the end of the list of benefits by saying ‘You also get life cover’, as though it is an added benefit. The ad according to me is quite a clever and tricky, it tries to address peoples’ need of getting a good ROI by suggesting that an insurance policy with Max New York Life will give them that. ROI is not a primary benefit any life insurance company can offer. So is the Max New York Life adviser in the ad advising correctly? Decide for yourself.