Page 26 - IC23 life insurance application

the opening up of the Insurance market in India the new private entrants into the

insurance market are eying to this pension market which remains largely

unexploited. Pension plans combined with health care benefits shall become more

popular than ordinary insurance. Irrespective of the relative importance, it goes

without saying that today our insurance agents have completely neglected this

market and sooner they appreciate better.

Section B

Other savings instruments like Shares Units Capital Markets Mutual Funds etc.

vis- a-vis- Insurance

An agent does meet situations while canvassing life insurance where the prospect

starts comparing the returns of life insurance with other saving instruments like

Shares, Units, Capital Market and Mutual Funds. But such comparison is uncalled

for, for the basic difference that exists between such savings instruments and life

insurance.

1) These savings depend for their value on the market condition. The values

fluctuate. Uncertainty prevails on the ultimate value which the depositor would

receive. On the other hand life insurance intends to substitute certaintly for

uncertaintity. Bonus element in life insurance, has been increasing every-time,

though theoretically it can decrease if the return on investment is reduced. Even to

eliminate this marginal uncertainty, the Insurance Companies has come to offer

policies with guaranteed return and it is quite substantial.

2) Any rate of return cannot guarantee to pay the targeted amount on death when it

occurs. It is only life insurance which can do it .

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