The Kinder Joy chocolate brand, made famous by the Italian company Ferraro, has become a household name for its innovative marketing strategy of including a surprise toy inside each egg-shaped chocolate package. This surprise factor has become so popular that people often purchase Kinder Joy not for the chocolates themselves but for the toys.
This concept of a “sweetener” is not limited to the confectionery industry; it can also be seen in the investment world. Ancillary benefits, such as tax incentives, are often used to entice people into making investments. However, the focus becomes so much on the tax benefits that the actual product and its features are often overlooked.
The significant announcements in the Budget, which proposes taxing the maturity proceeds of life insurance policies, will have a negative impact on the long-term sales of insurance policies. But, the industry is ready to turn this adversity into an opportunity. The insurance services sector is expected to be particularly active in the upcoming months. Agents will push to sell high-ticket (more than five lakhs) premium policies before the financial year ends. The next two months are expected to be the busiest, with agents projecting this as a once-in-a-lifetime chance to invest large amounts of premium to save tax on maturity.
However, it’s important to remember that personal finance is just that – personal. Just because a tax change may have put certain kinds of life insurance policies in the spotlight, it doesn’t necessarily mean it’s the right choice for everyone. When making investment decisions, it’s crucial to have a plan in place, considering your financial goals and needs. Taxation and other incentives should be considered, but not at the cost of losing sight of your overall financial objectives.
Don’t be swayed by persuasive sales tactics; as the saying goes, “Let the buyer beware”. Always ensure that your needs and goals drive your investment choices rather than a perceived “once-in-a-lifetime” opportunity.