The principle of Insurance is based on sharing the collective fund and settle claims with people, thereby help them to overcome economical risk. This the insured gets against premium agreed.
The purpose of investing in stocks for an individual is to participate in profit or loss of big enterprises run by professional corporate and the advantage to public companies is that they get public money to finance their big projects.
The purpose of mutual Fund is to cater to the needs of investors who are not competent to directly invest in shares but need expert managers of Mutual Funds ti invest for them.
Is it advisable and meaningful to Mix all these products? Insurance companies have launched and mis sold many ULIP Schemes which are based on funds of shares.
There are many simpler schemes of insurances which already exist with the insurance companies. Plus IRDA and Ministry of finance can easily force /guide/instruct these companies to have these simple products. The main problem is marketing by agents. Neither Sales Managers, Seniors, agents of Insurance companies are interested to sell them. These Simple and pure insurance schemes providing real purpose of the insurance can be directly sold by insurance companies by keeping staff ( no need of agents).
Common men will buy these schemes as they do deposit their Term deposits in banks.
Simplifying and standardizing marketing by insurance companies and dismantling the Agent Marketing is the key to stop the menace of mis selling and mystery selling.
Bankim Shah
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