Saturday, October 20, 2012

Why Insure Ourselves?



Insuring ourselves is one of the silliest things we can do in life, I think.  Life insurance means that a certain amount will be paid to my dependents after my death.  Fine, there’s nothing that can give me more happiness (after my death) than seeing my beloved ones(not dependents, but loved ones) living happily after my death.
The latest issue of the Frontline [dated 2 Nov 2012] argues that insurance has been made just another business of the capitalists.  For example, it says that “countries where competition is rife in the insurance industry, such as the U.S. have been characterised by a large number of failures.”  India is opening up itself to that competition. Because Dr Manmohan Singh has to save his image in the Western press. 
Just because the Western press called Dr Singh (our beloved PM) all kinds of names, he chose to give us a lot of FDI, hike in prices of cooking gas and other items precious to most of us (leaving aside the most people who have no access to cooking gas and are also driven out of their simple dwellings)...
Insurance is one another area where we (India) have invited FDI.  A sure way of losing our hard-earned money.  Nobody will get anything much from the business called insurance, neither in this life nor in the life hereafter.  No, I won’t be able to smile, if there’s a life hereafter, seeing my beloved ones living happily with the money they get from my insurance policies. 
My wife and I have insurance policies with LIC, Tata, ICICI and Reliance.  Except LIC (which is a government of India’s poorly managed entity as far as the premium paying labour is concerned), no other company promises anything good.  All our policies, as of now, stand at a loss.  What we will be paid will be less than what we have paid to the companies. 
The Reliance bosses will build good and tall houses for themselves with our money.   Tata will buy the best complex in Connaught Place in Delhi with our money.  Every capitalist will do just that.  They won’t give us anything much in return except promises.
The latest example is when ICICI contacted my wife.  They said her policy was not making much benefit.  My wife handed over the call to me since it was I who started the insurance in her name.  I told them to switch the policy from stock market-based to a government bond-based one.  They sent their agent to our residence for making the switch.  Fine.  That was a good move, I thought.  The agent advised us to start a new policy based on government bonds and to which my wife could transfer her old policy.  But the agent never switched the policy. He just opened a new policy in wife's name. Now, she ended up having two policies in place of one! Weeks later, when I questioned why the switch was not made, I was told that we had not signed the application form meant for that.  I asked the agent why he had not brought the form. He said that his company did not encourage any surrender or switch-over of policies since such acts would engender losses for the company.  He promised to bring the required form.  He never did.  But I won’t leave him.  I won’t leave the corporation called ICICI at least. 

Reliance did the same to me earlier.  They sold me another policy using another fraudulent method.  I have never managed to learn the devious ways of the corporate sector.
How many people bother to follow up their policies this way?   As long as we don’t follow up every minute detail, the private sector will keep cheating us.  The government sector took some bribes and did the job of giving whatever little they promised – just as the banks would do.  The private sector is swallowing us up alive.
Capitalism has failed in America and other countries.  Capitalism is all about profit and nothing else.  It can give us the latest technology which will, of course, keep changing so that we will keep buying and paying....Pay them!  That’s all what capitalism is about.
The latest one act play I wrote for my students is: Parivartan in the Palace.  One of the characters, a minister in the Palace, tells the King:
It’s because of the system, Your Excellency.  Change the system.  What do we know about the people?  We live in air-conditioned palaces.  We travel in air-conditioned vehicles.  Have you ever seen a poor man like this [points at Beggar], your Excellency?  Have you felt the pulse of his veins?  Have you experienced the love that flows in his blood?  Have you ever stopped to touch a person with love?  Even to smile at a person with concern?  What did we do?  We made economy the basis of everything.  Money, money, money.  What about relationships?  This is the parivartan that is needed, Your Excellency.  Build a system founded on relationships.”
Insurance is business.  It’s not about relationships. 
Every insurance policy of mine and my wife’s (excluding the LIC ones which didn’t promise any pie in the sky) is running at a loss as far as the clients are concerned.  That’s simple fact.  The tragedy is that they won’t ever give anything to the next generation except the lesson that you can cheat (your clients) and win (in business).
My view is that we should say good bye to the private insurance industry which simply steals our money... hoping like ourselves that we will stay alive long enough to pay them the premiums so that they will flourish.  And they will flourish on our money!


18 comments:

  1. in my limited knowledge, "life insurance" is a misnomer. we actually invest in our own death, the returns of which are reaped by our nominees.

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    1. So, Chinmoy, shall we call it 'death insurance'?

      My question, however, is whether even my nominee will get anything from my insurance policy. She won't. Because the privatisation of insurance has ensured that the profits will only go to the corporate sector that'
      s running the business, not to the client.

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  2. The business of insuring lives is first of all an oxymoron. You are not insuring, you are creating a money equivalent of the loss of life, which I think is sad, though perhaps needed in a system that lacks any semblance of social welfare. The reason that these institutions advertise so much with a highly emotional tone is only to get your business, and they have perfected the system of getting your business.

    Jobs selling insurance are double edged swords. Each agent has a target, which if not met, leads them to lose position, money or even the job itself. Most agents get a large part of the premium as incentive for the first three years. The first premium goes almost entirely to the agent, and the percentage declines over the years. Hence the agent is really interested in only making that sale and getting that first premium. Any problems after that, like the ones you are facing will be handled by customer care, who will then assign another agent to you to solve it, who is not interested in anything beyond making a fresh sale. Thus the cycle goes on.

    Your post is about insurance, but this is the logic behind all marketing today. Corporate social responsibility is another such farce. While it is true that many corporates are doing a whole lot of work in this area, one has to see it in perspective. A multi-national packaged water company claims it is putting more water back into earth than it is taking out. This is printed on its packages. Alcohol companies promoting research on alcoholism or buying media time to endorse "responsible drinking." Monsanto and Dow Chemical sponsoring social events. The joke is endless. All they want is for you to think that they are doing you good. Apologies for the long rant, but loved your post, but couldn't say it in just that many words.

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    1. Thanks so much, Subhorup, you've raised a lot of very thought-provoking points. Business is the best form of hypocrisy. They give you a smile in front with a knife at the back. At our backs, in fact. Worst of all, they are sponsoring everything including our entertainment (the TV,especially). They give us their value system which is thoroughly skewed. Our children learn all wrong lessons...

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    2. I remembered this quote that I shared recently, and felt this was an appropriate discussion to add it to.

      One of my favorite quotes from the activist street artist Banksy. "People are taking the piss out of you everyday. They butt into your life, take a cheap shot at you and then disappear. They leer at you from tall buildings and make you feel
      small. They make flippant comments from buses that imply you're not sexy enough and that all the fun is happening somewhere else. They are on TV making your girlfriend feel inadequate. They have access to the most sophisticated technology the world has ever seen and they bully you with it. They are "The Advertisers" and they are laughing at you. You, however, are forbidden to touch them. Trademarks, intellectual property rights and copyright law mean advertisers can say what they like wherever they like with total impunity. Fuck that. Any advert in a public space that gives you no choice whether you see it or not is yours. It's yours to take, re-arrange and re-use. You can do whatever you like with it. Asking for permission is like asking to keep a rock someone just threw at your head. You owe the companies nothing. Less than nothing, you especially don't owe them any courtesy. They owe you. They have re-arranged the world to put themselves in front of you. They never asked for your permission, don't even start asking for theirs." - Banksy.

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    3. Thanks a tonne, Subhorup. The quote is just to my liking. What I would have said in different (less effective, perhaps) words. What I'm trying to question most of the time is this pervasiveness of the trader class in our life.

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  3. Mr.Matheikal,
    Thoroughly enjoyed reading this piece, though I suffered the pain that the perspective you offer creates...
    Can't agree with you more: businesses are based on profits and the customer is always being fleeced though the scale of fleecing may be tolerable, at times. When we go to a trader/store for stuff, we know that the fellow is making a profit/margin but we don't mind that. The problem is the lack of ethics in the sales/marketing of products and as you point out, insurance is perhaps the worst culprit... Insurance companies make us feel like they are doing us some favour by 'providing' the 'survivors' with some money, while they are making massive profits. Fairness creams, other 'beauty' products, 'health' drinks all bring to the table a certain high level of immorality in the same way...
    I do hope we can all boycott such products, before we get strangled by capitalist corporation giants. I don't mind the shopkeeper across my street making some profit though...

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    1. Very glad to see you here, Deepesh. Thank you.

      I merely made a reference to the Frontline article because I had so many other things to say. In fact, the Frontline artilces (a whole series of them in the issue, as is usual with the magazine) deserve readership. They endorse what you and I are trying to tell the people.

      You are absolutely right when you say we don't mind paying profits to the dealers if it's fair dealing. The problem is when they deceive us...

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  4. In the US, the standing joke is this: the daughter tells her parents that she is serious about the guy she is going out with. To the parents query what the guy does for a living, the daughter says "selling insurance". The father throws up his arms in disgust,"Oh no, anything but that profession!"

    But, tell me every profession seeks profit, even teaching. Seeking profits goes beyond capitalism / socialism or any other ism. Take religion, for instance. It is the most profitable of all professions. God is the ultimate insurance agent. And, we have enough FDIs in that! Why are we not exercised about that? Because it is religion. Is that why?

    In insurance, two things come together. One has to understand the in-built and cultivated pessimism of the buyer and the optimism of the seller. The seller thinks that the buyer will live long enough for the seller to realize his profits. Therefore, the best antidote to insurance is to die early! :)))

    Do you know that the largest outgo of a neurosurgeon or a ob-gyn in the US is for malpractice insurance! Insurance is part of transactions in a society where there are uncertainties.

    I know I have gone on a tangent, but I tend to look at things not at the level of singletons; I am more interested in class-action types of things.

    RE

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    1. I'm not against profit, Raghuram. I'm not against insurance either. I'm questioning the methods used by the private sector for foisting policies on clients. I'm also questioning the very philosophy of privatising everything. Yes, that way, you can say I'm questioning profiteering. But make profits sincerely. Earn your wages doing the right thing. That's all what I'm saying. This needs no religion. It's plain ordinary ethics.

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    2. OK. But religion is plain unethical. Anyway you see it, religion is unethical - promising things that cannot be delivered, not much differnt than insurance.

      RE

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    3. Yes, if there's a comparison between religion and insurance, you've said it best.

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  5. Sir, I am a part of a capitalist household and that's the kind of mentality I have. And the philosophy is something like this - 'you either be practical or be a neo-socialist'. It's only when you associated insurance schemes with 'relationships' did I see your point.
    I'm all for a complete overhaul of the system but where does it end. 30 years ago people criticized the licence raj and then came LPG. It brought it's own side-effects. And now people are fed up with the Indian styled Keynesianism.
    My point is pretty simple: No matter what the kind of social structure is or for that matter how it's subjects conduct themselves, it's funny to wish for an ideal scheme of things. Learning to compromise with the system is one thing and to smartly bypass it quite another.

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    1. Sid, I understand your point very well. Ultimately the system is not what matters; it is the people, especially those who implement the system. It is quite naive to assume that people will be morally upright all the time. But we can always be self-critical; we have to be, in fact. I wouldn't have had any problem with capitalism had it been what the Brettonwood institutions originally meant it to be: wealth creation for the welfare of all. I'm merely reminding people of the need for that. I'm saying that we have lost the focus; we have shifted it to wealth and wealth only. In the process we lost human values.

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  6. I too have had bad experiences with those so called big empires. I completely agree with what you have written!

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    1. Amit, unfortunately this sort of experiences are going to be common. Until somebody comes up with a revolutionary idea. I was an initial supporter of Anna Hazare and Arvind Kejriwal. But I realised they wouldn't be able to deliver. We need some real Gandhi.

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  7. Interesting post. It is true that insurance is a loss making avenue for the public. Only if you die soon after doing the insurance and your dependent ones are fiesty enough to extract the money from the insurance company, then it will work.

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    1. For most people isurance is both a kind of saving PLUS insurance. The private companies are swindling people on their desire for saving. Most people who go in for insurance are those who manage to put aside their meagre savings for that purpose. It's only the govt that can really do this business called insurance, I think. Insurance cannot be a profit-motivated enterprise.

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