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'Story on health insurance was an eye-opener'

June 25, 2008

The story on strategies for fund investing (Loss Today, Gain Tomorrow) was disappointing. You should have given a list of mutual funds that are performing well. The story should have been a report card of the fund industry’s performance in the first half of the year. Instead, your story left the readers confused, especially the section on evaluation ratios. You must keep new investors in mind while doing such a technical story.

—Sandeep Kumar, Amritsar

We have received several letters about the story on statistical tools used for evaluating mutual funds. Most readers liked it and want more information, but some are unhappy with its academic bent. Our objective is to both inform and educate our readers. This story sought to educate investors about some advanced evaluation ratios. If you did not understand the tools, the mistake may lie in our inability to simplify the subject but not in the choice of content. You may like to read our response to other letters in this story: 'Ratios Revisited'.

Most people ignore health insurance. This is why your story (Protect your Health) was an eye-opener. Employees of private companies mistakenly think that the health insurance offered by their employers is adequate. But with rising medical costs, it is important to review the extent of cover that these policies provide. Your story will be handy in this regard.

—Bal Govind, Bareilly

As you rightly point out, expensive medical facilities have made health insurance a necessary investment. But there are different types of health insurance policies available in the market today. Our story endeavoured to explain how to choose a policy depending on various parameters.

I regularly scan data on smallcap stocks in the section “Looking for Value”. Please try to give the face value of these stocks too.

—Irshad Ahmed Khan, Nagpur

The face value of a stock is not used in any evaluation ratio. Moreover, it may be changed by the company any time. Dividend is declared on the face value of a stock, dividend yield is calculated on the stock’s current market price. Therefore, we do not give this information.

Your story on heath insurance (Protect your Health) was very comprehensive. You rightly advised the readers to check the cost of these policies before buying them. Perhaps the government should consider making it compulsory for everyone to buy life and health insurance policies.

—Akhilesh Kumar Sah, Faizabad

We are glad that you found the story useful. Vehicle insurance is made compulsory for vehicle owners to ensure that they have funds to pay others for damages caused by their driving mistakes. The same principle cannot be applied to either life or health insurance. However, as medical costs rise, health insurance will become a need rather than a matter of choice.

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