Triple blow for LIC policyholders

LIC's participating policyholders belong to a rare class of investors who have lost out three times over the same investment. Participating policies are effectively insurance-cum-investment plans wherein policyholders are entitled to returns that vary with the profits of the insurance company. With the interests of both policyholders and insurance companies aligned together, the quantum of returns accruing every year to participating policyholders is proportional to the insurer's profits, which are based on the insurer's claim experience, investment returns and so on. Developments in government-owned Life Insurance Corporation are clear tales of caution for investors. One, mixing insurance and investment is always a bad idea, as the