Mis-selling of insurance
This refers to ‘Incompatible duo’ (March 5). Insurance has been the most mis-sold financial product in India and this can be ascertained from the fact that rather than trying to protect the person and selling him basic term insurance, ULIP and endowment plans are sold as investment products. It is ironic that despite so much stress on financial literacy in recent times, people still fall for such products. Investment in mutual funds through SIP should never be mixed with life insurance as both have different objectives altogether. A few bad experiences in claim settlement cases would spoil the whole SIP market and that would be the most undesirable thing for mutual fund houses. So the mutual fund industry should not get tempted as they consistently get around ₹25,000 crore monthly fund flow from SIPs.
Bal Govind
Noida
Bundling of products
The proposed push to enhance mutual fund SIP investments through bundling with insurance products is fraught with many challenges, be it with respect to discontinued policies or the hurdles involved in the claim settlement process. Though there are many dissimilarities between the two products and the jelling is complex, the cross-selling model followed by banks earlier, may address many issues. Banks sold only health and life insurance products through tie-ups with insurers, where the policies were offered at concessional premiums by insurers, who also extended hassle-free claim settlement services to the bank depositors through their own AMCs.
Likewise, mutual funds can also encourage investors to have dual products under single window, which would not only benefit the investors through streamlined long-term investments, but also enhance the additional revenue potential of product selling banks, apart from saving the insurance industry impacted due to phasing out of tax breaks.
Sitaram Popuri
Bengaluru
Fallout of Trump tariffs
Apropos ‘Trump tariffs trigger retaliation from China, Canada; India readies strategy’ (March 5), it appears that, in Trump’s world-view, the basis of all international relations is trade and trade alone and all other ties are incidental to trade. Even wars and geopolitical issues are being viewed by him through the prism of trade. The superior strength of the dollar and the the US economy, built and fortified by the immigrant cream of the world’s best minds, has come handy to Trump to wage his trade and tariff war. For now, every country or a group of countries need to devise their own strategies to overcome the difficulties arising from the tariff war started by Trump. One thing is certain, that no agreement, bilateral or multilateral, is sacrosanct any more and nations around the world should be prepared to face any kind of threat or disruption on the trade front from the US. A new international order, rather disorder, is in the making and international trade and tariffs would take centre-stage.
Kosaraju Chandramouli
Hyderabad
