A must read article by Deepak Shenoy!! Some snippets
Insurance products are incredibly complex, despite their heavy regulation. Financial products are typically of two types —high-risk, where the returns cannot be predicted in any reasonable manner, and low-risk, where the return is either guaranteed or specified (the risk is in whether the seller will go bust). Equity is a high-risk proposition, while fixed deposit and other debt options are the second. Insurance products provide a mix-and-match,
Most people give up before they reach the "real return" calculation — which is why insurers can easily stuff charges into such policies, knowing that if someone is silly enough to invest with a 5% real return, he won't even know that they can take a significant chunk of money as commissions.
2 comments:
Good article. Good blog.
Insurance articles are abundantly complex, admitting their abundant regulation. Financial articles are about of two types —high-risk, area the allotment cannot be predicted in any reasonable manner, and low-risk, area the acknowledgment is either affirmed or defined (the accident is in whether the agent will go bust).
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