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We need to understand that insurance is a risk product and investment or whatever return comes is just an add-on.
D K Mehrotra, Chairman, LIC says this in an interview with LiveMint
This really is a lucid explanation of insurance. But there are various reactions to this statement.
- The returns are piddly, very less and does not justify putting your money into insurance products.
- This piddly return is better than making losses in the stock markets.
- I put in my money in an insurance product because of my friend/relative/neighbour who is an insurance agent. Please don’t bother me with jargons.
- I get good service from my insurance agent and I care about that rather than returns.
- I really don’t know or care
What is your reaction? Do share.
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Insurance is a risk management tool which aims at providing the required risk cover with an “option” of savings,but is aggressively marketed by most Insurance Companies the other way round.. primarily as an investment product with features like guaranteed NAV, assured returns,loyalty bonus etc and an add-on insurance!Hopefully Budget 2012 with the clause that only life policies with an insurance cover of at least 10 times the premium will be eligible for tax rebate would protect investors from being a target of such mis-selling.