- The life of the policyholder may be at great risk if the policy is assigned to someone else. “Only the life insured does not change — and it is here that the possibility of moral hazards creeps in. The person who buys the policy will gain if the seller dies a natural or an unnatural death.
- The emergence of a possible grey market transaction during the modus operandi and the problems mount.
- In a fiercely competitive life insurance maket, an agent can hardsell his company’s policy by asking the policyholder to forgo or sell off his existing policy by arranging a buyer.
- There has been various instances of money laundering and there could be a lot of misuse.
- Trading in policies go against principles of insurable interest and increases the moral hazards.
Editorials are welcoming the new ruling without understanding the difference between Insurance and Investment. A free and fair debate is desirable. What do you think?
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