The Insurance Regulator (IRDA) has capped the selling commission on the Unit Linked Insurance Policies (ULIP). ULIP has been masquerading as an insurance product and has been the biggest instrument of legal cheating in India. However, the IRDA seems to be a reluctant regulator. There is no attempt to address the opacity in the insurance product. Customers are being ripped off whilst their fear is being used as a selling tool.
I have belief that we need health insurance, crop insurance, fire insurance (not so sure), accident insurance etc., However, one insurance man does not need is Life Insurance. And ULIP is NOT INSURANCE at all. (T)ULIP it is.
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I would like to know more about your views on why insurance (term insurance, nothing else!) is not necessary or relevant?
If you live you do not need. If you die pre mature, your family gains. If you are well off and have planned, insurance does not add. Odds are extremely high that you will live long. If not, by now the insurance companies should have been bust.
So, take a whole life policy when young, and once financially secure, surrender the policy and invest money elsewhere, where intermediation costs do not eat in to investment returns.
I know that this may sound like blasphemy, but if you keep emotion to one side, the uselessness of life insurance is apparent.
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