Thanks to the recent verdict by the Mumbai High Court, now the insurance policyholders with lapsed policies have a big reason to cheer. The high court ruling which favored the trading of the insurance policies has come as a blessing in disguise for them. They can now easily get rid of their lapsed policies while simultaneously earning a little more than what they can get from the insurance company as the surrender value. Thus, this acts as yet another investment avenue for policyholders to raise money at a short notice.
Traditionally, it has been held that insurance and investment serve two different purposes. Insurance is typically considered as a vehicle of protection and, hence, makes sense even if it offers a lower rate of return. On the other hand, an investment decision predominantly depends on the rate of return that the avenue offers.
Nevertheless, the line of difference seems to be blurring in recent times with more number of people seeing insurance as yet another alternative investment option. Paving the way for the free trading of insurance policies will further aid in reinforcing this notion. However, there are mixed opinions about the relevance of policy trading in the Indian context. While some of the industry experts are favoring the ruling, others fear that it may end up creating a macabre market where investors take bets on the lives of others. |
