Expert Zone

Straight from the Specialists

Can we provide more cover at lower costs?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

When it comes to financial products, does the general rule “low cost = low quality” hold true? By quality, I mean the quality of experience and service levels that should be expected from a standardised product.

One industry which consistently beats this rule is the electronic hardware industry which keeps packing in more punch into phones, laptops and cameras at more or less the same price or even at lower prices. For a limited period of time, the niche gadget charges a premium but very soon the same power gadget is available at a much reduced cost. Is it even fair to draw this parallel between a hardware industry and a service industry?

Does it require regulatory intervention to put an end to pre-payment charges on loans — and even then selectively? Does it require regulatory intervention to slash entry and exit loads on mutual funds? Does it require regulatory intervention to cut down the excessive charges on unit-linked insurance plans? Since time immemorial, interest rates on credit cards have been ridiculously high — once you get into the revolving credit trap with a card it’s almost impossible to get out.

Health insurance in new, improved avatar

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

“Till now our focus was to work as a development authority but now it has been more than a decade and it is time to act as a regulatory authority,” Hari Narayan, the chairman of India’s Insurance Regulatory and Development Authority (IRDA) was quoted as saying in a recent interview.

Slow death for push marketing of insurance?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Just five of the 23 life insurance companies in India (I have excluded Edelweiss Tokio as they are new entrants) could increase their premium collection in 2011-2012 over the previous year. In fact, none of the top 10 premium collectors of 2010-2011 could increase their sales in 2011-2012. Why so?

Tax breaks only if insurance cover is 10 times annual premium

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Tax exemption under Section 80C is one of the major drivers of insurance sales. In fact, it has become a trend to launch a new variant of single-premium plans in February-March to cater to those who just want to make some investment to avail tax benefits.

Can someone force an insurance product on you?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Often, you may think you are getting a great deal on an insurance product. Chances are you might not have given this much thought.

Lack of retirement planning options

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Unlike people in developed nations such as the U.S. and Europe, people in India are known for their conservative habit of saving. The need for regular income after retirement is a concern that haunts most Indians.

No mad rush for life insurance IPOs

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Last week, the regulator finally released the long-awaited draft for insurance companies to raise capital through an Initial Public Offer (IPO). As soon as this announcement was made, the entire industry was caught in a frenzy trying to decipher every word.

Insurance industry players go online — reluctantly

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

From the year 2000 onwards, the Indian insurance industry saw a number of private players entering through the gates thrown open by the government. Public sector player LIC had already gained an edge by being a pioneer in the life insurance space. With an army of agents, LIC was way ahead of these latecomers and found itself settled comfortably.

Five things to do before you turn 30 — financially

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

1) Start investing in Mutual Funds
There is a reason why I mention this as the first point in the article. Mutual funds are by far the best starting tool for any investor. And this holds true for any type of investor — extremely aggressive ones and those who do not know much about investments.

The tough part of managing the portfolio is best left to the experienced funds managers who have adequate resources and the knowledge to best maintain the returns on their funds portfolio and manage the associate risks. They are far better informed than an individual can expect to be in most cases.

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