Insurance is one sector that has missed the train to be a 20Th century product. Mostly I think its an obsession with the west that India majorly lacks having new creative Insurance policies launched. From what I remember, Insurance has always remained a myth to many and a tax saving policy to the rest.
So, definition of Insurance in today's world is "A Money/Tax management policy in which u invest to never see the money and only chances of higher returns is by your eventual death". Why should I invest in any policy that will see a greater return only if die ? - is something I have been thinking for a while, might be another reason why I stopped investing in pension plans/life insurance/Accidental policy etc etc.
Just for information, LIC is India's biggest bank. People invest in LIC over a life to see a 6-8% return and some unfortunate people never live to see it. I'm not interested in debating the success of the product but actually seeing how the same policy can be made more lucrative for people like me.
An Insurance policy should look like this -
Minimum Investment - 60,000 - Annual, 5,000 per Month
Rate of return - 4% simple interest on the total investment capital.
Minimum locking period - 3 Years
Return -
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1. Half the interest rate on the capital at anytime after the locking period.
2. Membership to local group of Social club/fitness clubs/Gyms/Spa etc.
3. Membership to a holiday club like Club Mahindra.
4. Shopper club membership/ Flight membership. For example - Shopper's Stop etc
5. Privilege customer status for cinema halls/ restaurants / Pubs etc.
6. Easy access to Loans. Example - if a person can get others to pledge on his behalf their own policies to cover the loan amount, Loan should be offered at rate little more than the one being offered as returns.
This is what I call insurance, I hope someone in the business is actually thinking on similar lines.
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