April 18, 2008

Spur of the Moment

The constant news on inflation this past month got me thinking about people who have retired and I wondered how they cope. And suddenly it struck me that Insurance companies can develop policies to address this issue. I am not sure if its practical but can be fine tuned by economists ( and I am not one! ). The idea is like this... an individual maybe given an option to give his monthly requirements (grocery /fuel / vegetables /fruits) and the Insurance company can give a policy to meet these demands. This will ensure adequate safety for the policy holder against inflation and the insurance company will anyway benefit through the premia collected. I sounded this out to an expert who thought it was quite original:-). Any Insurance guys out there reading this post can suggest this as a possible product and don't forget to acknowledge me for the IP. Hahaha.

3 comments:

rajesh said...

Raji..

This is a really nice idea. Insurance for the old people but...the insurance companies will prob make a loss as they will need to tackle with the inflation anyway. And moreover, normally when ppl pay premium, not everyone claims but in this case, it looks like everyone will make a claim!
Instead a higher but tax free FD scheme is more suitable for oldies..

R Swaminathan said...

Good idea! However there may be practical problems in implementing a scheme like this. A better solution would be to give "inflation adjusted returns", where the abolute returns are indexed to the cost of living index.

Raji said...

Swamy, your suggestion is also a kind of insurance - so far has been the domain of banks.... insurance policies can get more creative is my point.