Regulators have a terrific ability to speak the language of the most dominant player. Have you observed that?
When Hdfc Standard Life Insurance came out with ‘riders’ – fairly obviously some riders were priced more than the death main clause (will not go into the reasons here). This meant you could take a ‘Term life insurance’ for Rs. 50,00,000 (say costing Rs. 28,000 premium) along with a CRITICAL ILLNESS rider (costing Rs. 40,000 premium) for the same person.
However the regulator brought out a law saying “the rider premium had to be equal or less than the main premium’. This law as amusing to say the least. The people in the industry could guess…but just grin.
Let us take one stupidly named product called ‘Monthly Income Plan’ by mutual funds. About 99% of the investing population, 97% of the people connected with the industry and 100% of the regulators think MIP means the investor WILL get a cheque every month – like a bank or a post office.
Correct? NO. Wrong. There are no guarantees, and many MIPs have skipped dividends many times !
When will SEBI change the name of this balanced fund which was created to attract people from post offices and UTI’s guaranteed schemes?
hmmmmmmmmm Deven Shah over to you please..
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