My ULIP agent: Many many thanks to you

Flash back to January 2007. I had joined a new company, got good package and had a good sum returned from previous company. By the end of Jan it was raining tax savings schemes and alike instruments all around. I was asked to provide my tax saving stuff and alas I had nothing. Suddenly one fine day the God himself decided to meet me in the form of an ULIP agent. He offered me a product too lucrative to be ignored. I thought one should listen when opportunity knows. I wholeheartedly poured in 70K as the annual premium for the sum assured 7 lakhs. The God said, you look so healthy, nothing will happen to you, thus 7 lakh is more then sufficient for the insurance cover. I happily agreed, after all he was personal finance God.

Fast forward to Jan 2008; The stock market was euphoric and the wisest man inside me chose the "Growth" option in the ULIP, I was too happy to blab about my investment mantra and intelligent decisions. To boast about it I logged into the my savior ULIP web page and hit the 'fund value'. The whole world rolled in front of my eyes. While even my 'kam wali bai' had earned a lot in the stock market during that period, my safe fund showed me my fund value a little more than 30K. I thought to bash at the agent, who conveniently cut the phone. I then rang to the respective insurance company, who enlightened me with the fine details I didn't bother to read previously.

My policy had a funny deduction structure.

1. From the first premium 65% will be deducted as administration charges plus agent commission.(Oh God!)
2. Mortality charges
3. Some other management charges1%
4. 10% service tax and 2% education tax (close to 10.2%)
5. Some 2.75% annual charges

I was amazed at the scene of such a wonderful looting scheme and thought to cancel it. I then was enlightened about the surrender charges and I realized that I would have to pay more to surrender it :-) 

This was the mistake part of my investment life. I thanked my investment agent to teach me a wonderful lesson. I realized the importance of reading the fine print and more importantly, understanding the personal finance. That event left me a much more learned and motivated person.

Many many thanks Mr Agent!!!

P.S I still pat my back for not felling for this. The first year charges are 100%.