Tuesday, June 18, 2013

Where will the Mango Man go?


Many years ago, I wrote a piece titled “Are we raising a generation paupers?”
In that I had argued that with all the proposals being made for investments in insurances of all sorts, SIPs, mutual funds, housing, luxury vehicles, savings for children’s education and marriages   plus the enticements of clubs and holidays etc etc,  how much did  the ordinary middle class  family have left to actually live on after all those putaways?
This morning a wealth management CEO told readers that he put 20,000/- a month in two SIPS since she was born, for his  daughter’s graduation and post graduation. And then another for her marriage.
Now if you are putting away thirty grand a month in three SIPs for your presumably only kid, how much must you earn to maintain the lifestyle while bringing her up, clubs, holidays, jewelry for the wife plus health insurance and life insurance and other investments, plus purchase of properties and cars? Suppose another kid came along? Then what?
Bank deposits are an absolute No-No.  You need the money multipliers.  No mention of now regular collapse of some mutual fund scheme or the other or the walking away of the foreign companies from desi insurance companies.  LIC is absolutely anathema to such advisors.
What on earth does the poor ordinary person do, our Mango Man (aam aadmi) with only 4 or 5 digit annual income and a family of parents and children support?   

Any convenient poisons like those our farmer brethren use?

Sunday, June 02, 2013

Seniors: medical insurance rip-off

Was medical insurance brought to India only to fatten the already fat insurance moneybag, or to provide some relief from soaring medical costs to the general populace?
Let’s face it: the profit margins are cannot be the only considerations in medical insurance. The American example is a recent good one.
Here we have a classic fat-cat situation with medical insurance companies planning to elbow out senior citizens from medical cover from their offspring’s policies, without offering any suitable package that will benefit the seniors with a reasonably priced cover.  
Are they so unaware of ground realities that they do not know that the majority of those covered belong to a generation when retirement planning was virtually unheard of?  Those generations earned and spent it all on a house, if possible and the education of their children that they may live better than them.  Whatever little was saved was spent on higher education and marriages. A tiny majority qualified for  pensions now eroded with galloping inflation.
In that scenario, medical cover from their working children was a great relief in old age.  But within less than five years of introduction, those insurance big wigs in their ivory towers argue that the maximum outgo is for old people ... that becomes  misuse of an insurance policy that was created for this very purpose!
Executives who were virtually railroaded into it with the offer that the premiums would earn tax deductions, are now being shooed away -- now they are railroaded away from it with an additional premium, so that they may leave their old parents in the lurch, arguing that the extra burden is beyond their budgets.  In the bargain, no one stops to think whether that burden would be easy on the budget of a pensioner or a senior citizen clinging to old savings against the harsh grab of rising inflation all round.
What makes one ponder more is the fact that these so-called mediclaim companies were set up for public benefit.  Brings one to the question:  public benefit?   Which public are we talking about here – the general public which consists of working people and their aged retired parents or only the segment of the public that works in these companies and their top bosses who only consideration is the annual balance sheet showing a healthy profit?

Once again, it is the business elites versus the people of India. JAI HO!