This refers to the story on health insurance (The Healthy Approach, June 2010). Can an agent be held legally responsible for withholding information or promising benefits not assured by the policy? Also, given that an average buyer may not be able to understand the policy documents and promotional material, is there no one other than the agent who can be approached for advice?
Naresh Naik, Amritsar
While no legal action can be taken against an agent, the policy buyer can register a complaint with the insurance company if he feels the agent withheld vital information or promised benefits not covered by a product. If the company fails to provide a satisfactory response, he can approach the insurance ombudsman.
As for seeking clarification or dejargonising a policy, the distributor (agent) is usually the best person to approach for advice. A good agent not only helps you interpret the policy document, but also pick a product that suits your needs. If you are dissatisfied with his service, you can pick another agent, go directly to the insurance company or consult a financial planner.
The story on infrastructure sector (Paving the Way for Wealth, June 2010) focuses on small construction companies that offer good investment opportunities. For how long are these likely to be good investments and what would be the ideal holding period?
Sreejith Sivaraman, Chennai
The recommended infrastructure stocks are expected to be good investments for the next 2-3 years. So, if you buy them now and hold them for this period, they are likely to yield good returns. The sector has shown strong signs of a pick-up in demand in recent months and this is expected to result in more orders.
In the story on investing in mutual funds (Beyond Agents, June 2010), you have listed several sites through which one can invest. Do these portals charge a fee for their service? Also, is the research material adequate or should I scout for more information on the funds that I want to invest in?
Sannuta Raghu, Noida
While the Websites of fund houses don't charge investors, some online platforms levy a fee. In addition to the information provided by these portals, it is advisable to consult a professional or conduct a fund analysis. You can also go through our previous issue (Best Mutual Funds, June 2010) for a listing of the most promising schemes across six fund categories.
If allowances like HRA become taxable under the Direct Taxes Code (Tax Watch, June 2010), it will raise the tax liability of those living in rented accommodation. Won't this hurt the middle class?
Rudolph D'sa, Mangalore
The removal of exemptions might push up the taxable income, but the tax slabs under DTC are also set to be raised. Anybody earning up to Rs 10 lakh a year will pay only 10 per cent tax and there is a higher tax-saving deduction of up to Rs 3 lakh a year.
