Archive for December 9, 2006

Deferred annuity not a good idea

Publication: DNA, Mumbai;   Date: December 30, 2006;    Section: Personal Finance;   Page: 6.

Combining life insurance and pension planning is not right
Like childrens insurance plans, retirement plans also suffer from what I call the “label” effect. Right from emotionally appealing advertisements like “Sar Uthake Jiyo” to aggressive marketing tactics, the insurance industry leaves no stone unturned to cause confusion in the minds of buyers of insurance products. So, what exactly are retirement plans, or pension plans as they are popularly known as.
First for some definitions
a. Webster defines pension as a fixed-sum paid regularly especially to a person retired from service.
b. Annuity : A sum of money payable yearly or at other regular intervals » Read more..

Childrens insurance is a misnomer

Publication: DNA, Mumbai;   Date: Dec., 9, 2006;    Section: Personal Finance;   Page: 6

You and your child will do well by keeping insurance and investment decisions separate
Whats in a name” might sound cliché, but in the financial services industry, “Everything is in the name”. Classic examples of this are the ludicrous childrens insurance plans on offer. Its difficult to get a better marketing ploy where the idea is to strike an emotional chord with parents to do something for their kids.

The other day a friend called and asked me “Can you suggest some good Childrens Insurance Plans.” To this I asked, “What objectives are you trying to accomplish?” Pat came the response, “I heard that these are great investments. My aunt has been touting the 30% return that this policy has given in the last 3 years”.

» Read more..