Article Insurance Freebies May Not Always be Free

Discussion in 'Finance' started by Aspen, Jun 3, 2013.

  1. Aspen

    Aspen Super Moderator

    Freebies are most welcomed by the shoppers and you do not have to give a second thought to receive it. It is after all coming to you at free of cost and who knows you might get a product that is higher than the value of your purchase itself. Marketers use this gimmick to keep selling their inventory. Freebies often influence the purchasing minds and it is an effective strategy to pull the string. For example, you will be offered a free accident coverage policy when you buy a new vehicle or you will get a life cover for free when you start investing in mutual funds.

    Let’s look at some of the reasons and decide whether the freebies are really worth your attention.
    Here are the scenarios in which you will receive a freebie and lets analyze their advantages and disadvantages.

    Free Vehicle Insurance When You Buy New Vehicle:

    The automobile sales are at all time low and dealers are looking at various ways to keep their inventory off. You must understand that the free insurance is not really free but the consumer will have to bear its price. Or otherwise, the dealer will reduce the cash discount and will be stringent in offering the other forms of freebies such as essential accessories, services etc. A major disadvantage with this kind of insurance plan is that it will not cove the sophisticated features of your vehicle. Imagine a cover worth just 2 or 3 lakhs sans the engine protection is of no use to the vehicle owner.

    Life Insurance Cover With Your Investment Plans:

    Often, these investment products such as mutual fund investments come with the free life cover. An investor who is looking forward to invest 5000 INR per month can get this cover but he really has to analyze and understand the terms and conditions offered on these products. A downfall is that such products do not offer a life cover beyond 20 lakhs. The cover is applicable as long as you pay the SIPs. If you fail to pay 2 successive SIP amounts, the life cover will be void and you have to complete the cover of the SIP life term in order to avail the benefits.

    Experts argue that such free life covers cannot be a substitute for the main life cover product. People can have these freebies as something extra and they should not fail to grab a life cover which is 3 to 4 times of their annual package.

    Accidental Cover With Credit Cards:

    Banks are working hard to make you spend the extra money and get the interests out of your pocket. The free accidental coverage policies are one way to get the customer’s attention to apply for the card. These policies will have around 2 lakhs as the maximum coverage amount and this is absolutely not enough in case of crisis. This cannot be the substitute for your personal accident coverage policy. There will be some catch such as you have to spend a minimal required amount on the card for every month or quarter. Worst is the case when spending in jewellery shops or petrol bunks will not be included in this kind of purchases.

    I hope the above discussed points will throw some light on to the freebies offered by various marketers. It is now time to sharpen your eyes and ears to analyze the product is really needful.
    KeysSe7en and shabbir like this.
  2. roy_abhi

    roy_abhi New Member

    Thanks for revealing the truth behind the insurance market. We all should inquire well before taking any policy or insurance.

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