What Is The Role Of Insurance And Why It Should Be A Separate Need?

Insurance has been part of the financial lexicon for years now. What has changed to some extent though is how it perceives insurance. Most of us saw our parents using life insurance policies as the only investment and savings tool, other than fixed deposits (FD), to fund education, weddings and other needs of the family. Then we bought or were made to buy our own set of similar insurance policies once we entered the workforce. The first big change in how we perceived insurance—still largely as investment though—was when unit-linked insurance plans (Ulips) came in the mid-2000s. They promised market-linked returns and the exuberance at the time coupled with investors’ trust in older insurance institutions gave a leg up to these. But soon enough, people realised that these products were heavily front-loaded and agents were promising unreal returns. The 2008 crisis...