INSURANCE AND ITS WIDER PERSECPTIVE

The global recession has made the leading banks across the world to pay heavy price and still the worst of the crisis has yet to come. The current crisis has not spared the insurance companies either. The American international Group the largest and leading insurance companies in the world is fighting hard to escape from the brink of bankruptcy .The leading Indian private insurers also finding it hard to keep the momentum going .The new business premium collection  has shown significant drop and which naturally trickled down to affect the companies  profitability, on other hand Life insurance cooperation ,India is still doing reasonably well  because their business revolves more on traditional plans unlike the UlIPS. The Stock market shed more than 50 % of the value from its peak and going forward the market looks certain for some respite. The insurance industry business as such has become so disturbed because of the miss selling by the agents with out explaining them about the products clearly. The most of ULIP plans offers the flexibility to surrender the policy after three years and it has become blessing for the agents to pitch the product as similar to mutual funds. The most worrying factor seems to be the non disclosure of allocation charges which eats out the initial premium paid by the customers. The products looks good and attractive if it is been sold for long term ie, is more than period of 5 years, but with out proper knowledge about the products the miss selling becomes so rampant across the industry. The investment perspective should be broadly categorized in to two long term  and short term and the decision should be entirely from the part of the customer based on the money they can spare for such plans, If you require a fund for short term purpose please don’t park it in UlIP plans and better option would be to look out for  open ended mutual funds with aggressive equity exposure and if you are looking for long term tenure UlIPS are the better option because most of the times it edges out the MF investment after a period of five years. The important things to keep in mind while selecting the plans is allocation charges and fund management charges, most of the companies play a very balancing act by either keeping the FMC low or allocation charges    high and vice versa. Both these fixed charges affect the growth pattern of your investments. But such plans give you the option to have mix of investment and insurance. The important aspects which should be taken care would be the servicing part or advise rendered by the agents to their customer after the sales,the fund switching option should be the one which can give the customer a significant improve in their investments , but it should be properly tracked and feed backs should be  passed on  to the  customers  in the right  time .The insurance industry is offering different plans which suits you different needs and selecting the right one plan  would be your head ache ,but each and every one who earns should have such plans in their kitty to cater their financial needs in the different stages of their life. A balanced portfolio of ULIPS, mutual funds and direct exposure to stock market would be the right blend, again which depends up on your risk appetite. So all the options looks good and fair enough even in this falling market scenario  because there is no reason why we feel stock market  will not bounce back to its old glory , world has seen such recession and even before  and we could withstand  such set back  then why not this. The future is always better and prosperous for third world countries like India , china , brazil and so on and so forth .The aggressive capital economies like USA would really going to face the financial crunch and they are finding it  hard to swallow the bitter pill  .The India is going to be the next  financial power house in the coming future because we are the one of the better managed economy today  in the midst of this one going crisis and our measures seems to be paid off enough to protect our  investments in banks and other schemes. Our market regulators have rose up to the task to monitor the market effectively. So taking a leaf from the book of warren buffet “Be fearful when others are greedy and be greedy when others are fearful”, don’t we think this is the right time pursue our investment dreams for the future? We all should be partners of progress when our nation hits nadir of success.

 

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My Rumblings

Ventured into blogging since 2007, Interested in continuous engagement in the blogging sphere, keen on expressing ideas & thoughts on various topics which are contemporary and relevant.Continuous learner and conscious reader of books from various streams. Strongly believes that thoughts never becomes meaningful unless it is expressed, Constructive Criticism & feedback are viewed optimistically for the continuous self-improvement. Till I live in this world learning & unlearning is a continuous process, which comes to a halt only when you leave this world, Likes to be a good human being in thoughts, approach & action

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