Let's Talk Money: You've Worked Hard for It, Now Make It Work for You

by Monika Halan

First, there is a cost to buy the product. Look at this as an entry ticket, a ticket that allows you to board the bus. Different products, even if they do the same thing, have different entry costs, also called loads. These are commissions that the person selling collects from the manufacturer of the financial product. Understand that in certain kinds of life insurance products, like endowment and money-back plans, the cost of buying the product can be as high as 42 per cent. If your premium is Rs 1 lakh, Rs 42,000 goes straight to the agent selling it to you. In addition, they charge ‘policy administration charges’ or the cost to the insurance company to make that sale.