Insurance companies are spending more on commissions and running costs, which is eating into the value of the policies you buy.
Analysts say the cost of selling and managing insurance policies has been growing about 9% a year. Some products, like traditional life policies, pay agents as much as 60‑70% of the first year’s premium as commission.
For health, motor and savings plans, higher payouts to agents mean higher premiums for customers. Even though the government has removed GST on retail insurance from FY26, the savings from the tax cut are being offset by these rising costs.
The insurance regulator has set an overall expense cap and is now reviewing distribution costs. A special committee has been formed after the industry body and RBI raised concerns about the high outlays.
Consider policies that have lower commission structures or those that focus on pure protection rather than savings. Compare the total cost of ownership, not just the premium amount.
Even with tax relief, growing commissions and operating expenses are cutting into the returns you can expect from many insurance products. Keep an eye on regulatory changes and choose policies with transparent cost structures.
Remember, this is perspective, not a prediction. Do your own research before making any investment decisions.
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Join TelegramIndia's stock market bounced back on Monday, breaking a five‑day losing streak as optimism grew around upcoming trade talks between New Delhi and Washington. Market Overview The BSE Sensex climbed 301.93 points to finish at 83,878.17, while the NSE Nifty 50 added 106.95 points, closing at 25,790.25. The rally came after the incoming U.S. ambassador to India said trade discussions would start on Jan. 13, giving investors a confidence boost. Sector Highlights Metals: Strong buying in metal stocks helped lift the commodities segment. Banking and Consumer: Value‑focused investors moved into these stocks, expecting better third‑quarter earnings and steadier demand. Precious Metals: Gold continued to rise amid ongoing geopolitical tensions. Technical Snapshot Technical analyst Rupak De noted that the Nifty formed a "piercing line" pattern, hinting at a possible bullish reversal after recent selling pressure. On the hourly chart, the RSI moved out of the oversold zone, showing early signs of recovery. However, the index still faces resistance around the 26,000–26,100 range, with key support near 25,650. Most Traded Stocks In terms of value, the most active shares were Hindustan Copper, BSE, HDFC Bank, ICICI Bank, IFCI, Reliance Industries and Vodafone Idea. By volume, Vodafone Idea led the pack, followed by IFCI, YES Bank, Ola Electric Mobility, Suzlon Energy, Indian Energy Exchange and Hindustan Copper. Buyers and Sellers Stocks that attracted notable buying interest included IFCI, Force Motors, Hindustan Copper, BSE, Premier Energies, Power Finance Corp and Hindustan Zinc. Meanwhile, stocks such as Tejas Networks, City Union Bank, GE Vernova T&D India, Signature Global, Reliance Infrastructure, Maharashtra Scooter and Cohance Lifesciences faced selling pressure. Market Sentiment Overall sentiment was still bearish, with more stocks declining than advancing on the BSE. Remember, this is perspective, not prediction. Do your own research before making any investment decisions.
The market reacted sharply when the new U.S. ambassador to India spoke, highlighting how crucial the India‑U.S. trade deal has become for investors. Why the Ambassador’s Words Matter The ambassador hinted that a trade agreement is stalled. This raises concerns about possible higher tariffs and a cooling of diplomatic ties, which could affect companies that rely on U.S. exports. Potential Impact on Stocks Investors worry that a rift could hit sectors such as technology, pharmaceuticals, and consumer goods that have strong U.S. exposure. Higher tariffs: Could raise costs for exporters. Reduced demand: Companies may see slower sales in the U.S. market. Currency moves: Uncertainty can push the rupee lower, affecting importers. What Traders Should Watch Keep an eye on any official updates about the trade deal, statements from the commerce ministries, and movements in related stock indices. A clear signal of progress could boost sentiment, while further delays may keep the market cautious. Remember, this is perspective, not a prediction. Do your own research before making any investment decisions.
Japan’s biggest bank, MUFG, is paying a $200 million fee to stop the Shriram group from starting a competing lending business as it buys a 20% stake in Shriram Finance. Deal Overview MUFG will invest about $4.4 billion in Shriram Finance, a major lender based in Chennai. The investment will be made by issuing new shares, giving MUFG a 20% ownership after the deal. What Is a Non‑Compete Fee? A non‑compete fee is money paid to a seller to ensure they do not start a business that competes with the buyer after the sale. In many deals, the seller gives up control, so the fee is a way to protect the buyer’s investment. Why This Fee Is Unusual The Shriram Ownership Trust (SOT) will stay as promoter, keep management control and still hold about 20% of the company after the deal. Even though SOT remains involved, it will receive a $200 million payment – roughly 5% of the total deal value. The payment is not being offered to other shareholders, raising fairness concerns. Regulatory Concerns India’s market regulator, SEBI, requires that all shareholders be treated equally. If a promoter gets a special payment, it must be reflected in the price offered to public shareholders. In this case, the fee does not affect the open‑offer price because there is no change of control; MUFG is buying new shares, not existing ones. Analyst Opinions Shareholder advisory firm IiAS says the fee does not make sense since the promoter stays in control. Some advisors (InGovern, ISS) support the fee, while others (IiAS, SES) recommend voting against it. The non‑compete restriction will stay in place until MUFG’s stake falls below 10%, a level that may never be reached, effectively locking the promoters for a very long time. Bottom Line for Investors The $200 million fee benefits the Shriram promoters but does not give the same advantage to ordinary shareholders. Investors should watch how SEBI addresses the fairness issue and consider the long‑term impact of the restrictive clause on the company’s growth. Remember, this is perspective, not a prediction. Do your own research before making any investment decisions.