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  • Category: Miscellaneous

    Let us educate people on pure protection life insurance policies

    Very recently, an investment consultant was seen talking to a very young person, just twenty five years, with a finance background and now working in a good private sector bank. The young man has a MBA qualification from a leading B school of Chennai.

    The agent tried his best to convince the young man that he should go for the money back policy. The young man was very well informed and argued that investment in life insurance is only for a very big precaution. Hence, he sought details of pure protection schemes of various insurance companies including LIC.

    The agent was cornered. He did not expect a very enlightened customer. When the agent said that investment in a pure protection scheme would not come back at all, the young man said that he was ready and demanded details of only such schemes.

    The truth was that the young man had already invested in a good Systematic Investment Plan of a leading Mutual Fund, which also runs a famous Bank in the private sector. The agent was sorry that his argument was going nowhere. It was obvious that the guy was more interested in his commission.

    The young man even explained the benefits of such a pure protection scheme to his friends after the agent was gone. Why invest in life insurance where the return is just three percent or a little more?

    The time has come for all people to know everything about life insurance. In these days of hyper inflation, it is high time that all people are well informed about various investment avenues.
  • #654965
    Life Insurance policies can be divided broadly in two categories. First is the pure protection type in which there is no element of investment and for a bare minimum premium amount for a specified period one can get a life insurance cover. The policy ends like that only and there is no maturity benefit or return to the policy holder. Most of the people are now going for such policies because in the other types the return has substantially been reduced during the last few years.

    The second type of policies are having both the things covered - life as well as some return on the invested amount by way of premiums. In these policies the agents get good commission and they market them very aggressively.

    It is a prudent thing to go for a life insurance cover in the 'pure protection' or 'term' mode which will take care in case of eventualities. The premium is ale affordable.

    Earlier people used to go for investment of one time lump sum high amount in second type of policies and happily collected a return of 7-8% which was tax free also. Now Govt has modified the IT rules in this regard and for one time lump sum policies the TDS is being deducted on the gain at the time of maturity which forces an individual to show it properly in his tax return and pay the taxes on it accordingly.

    These are the basic things people should keep in mind while going for a life insurance policy.

    Knowledge is power.

  • #654984
    When it comes to investment in Life Insurance policies, many people blindly believe the agents without knowing in details about the policy. Though the awareness is increasing among the youths, in general, the scenario is very much dependent on the agents. There are few agents who are not clear about the details of the policies themselves but sell it to the customers thinking of the commission they will earn.

    Insurance is basically for protection and therefore, before investing in any insurance policies people should check the return and their profitability by comparing it to other investment schemes. Every financial company is announcing different policies thinking of their own profitabilities and there are many terms and conditions in the policy document which is not properly understood by a layman. People invest money mainly thinking of the future and for some specific purpose. So they must think of the return of their investment and choose policies by going through the details of different policies.

    When you are not aware of something, it is very easy to convince you by showing a rosy picture. But, it is not so easy to convince a knowledgeable person and that's why the knowledge about investment is necessary when people are thinking of investments.


    "Life is easier when you enjoy what you do"

  • #654990
    Insurance is different and investment is different. Insurance is to protect. If we are the earning member of the family, our absence should not be felt by the family financially. For this we have to insure our health . We have to see our present salary and if we can see that they will get almost equivalent to that salary that will be the best way. Otherwise they will have the financial problems.
    As mentioned by the author these days all the information is available on internet. So people who are interested can get the full information through the web. Even these days policies can be taken online. There we can avoid agent commission and the policy premium amount will be less as there is no commission is involved.
    Many of the agents may not be knowing the full details and they may not be getting updated also. So the agent will bring the development officer who is a full time employee can tell us all the details. So a good agent will try to bring the DO so that the client will also be happy.

    always confident

  • #655352
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  • #655353
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    Beware! I question everything and everybody.

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