One nation, one election

The report on poll expenses (April 12) is interesting. One nation, one election has been in public discourse recently with one of its objectives being to control poll related expenses.

However, the current system seems to have its benefits too. Parties are always on their toes. Under ONOE, once a party wins elections, it can rest till the next round of elections (after five years). So there is no incentive for good governance.

In the current situation, even if a party wins one election (say, national), another election (state or urban/rural local body) may be coming up after a year or two when the party will have to face the electorate again. So the nation could hope for good governance always.

V Vijaykumar

Pune

End combo products

The observation on the business model of Indian insurers and that insurance cum investment products offer neither adequate protection nor reasonable returns to the consumer is right on dot and the bane of insurance industry.

Through publicity gimmicks, insurance companies, lure the public with less than useful products, is an issue we have to face up to and address. Agents and companies do not promote pure insurance or term cover products.

Banks and other corporate agents use their network to earn a quick buck at the expense of their customers.

It is time to end all combination offers (of insurance and investment).

Jose Abraham

Kattiparambil

Surrender charges

The Editorial “Abject Surrender” wherein it states that imposition of high surrender charges doesn’t hold good is not in the correct perspective vis-a-vis the functioning of a life insurance company.

Life insurance scheme is an investment-cum-risk coverage holding and the premiums are structured based on mortality, interest, expenditure and bonus loading. A life insurance policy is a long-term proposition and the premium of the first few years goes into the risk coverage aspect of it making it break-even for the company only after almost half of the term is over.

The solvency ratio of a life insurance company is 150 per cent, implying after meeting all its insurance claim obligations it should have an excess of 50 per cent assets. So, Life Insurance companies for its profitable functioning has to have long term policies.

The company plans its resources depending upon the term of the policy and its persistency ratio. Short term policies are a losing proposition both for the policyholder as well as insurance company.

Hence, reducing the surrender charges is not feasible.

Roy Markose

Bengaluru

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