New Delhi: Chartered Accountant Meenal Goel asserts that investors can earn 12 percent returns by investing in a pre-owned insurance policy. According to Goel, purchasing a pre-owned insurance policy is similar to investing in a fixed-income option that yields higher returns.
Goel explained in a LinkedIn post how someone can legally assign their life insurance policy to another person under Section 38 of the Insurance Act when they can’t continue paying their premiums. Goel says that the new investor who has purchased the pre-owned insurance policy will continue paying premiums and get the maturity benefits. “Because these policies are transferred at a discount to their final value, the effective return can go up to 9–12% annually,” she wrote.
Goel has cautioned investors against missing important points like “this isn’t a get-rich product and the returns depend on the insurer’s credibility, policy tenure and IRR assumptions. She explains that “liquidity is limited, you can’t just exit anytime”.
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“So, should you invest? Only if you understand insurance well and are okay with holding till maturity.
Treat it as a fixed-income alternative, not an equity replacement. Do your due diligence before committing, it’s still a niche, evolving market,” she wrote.
Netizens react
The post has received widespread response on social media with many users commenting that turning lapsed insurance into a fixed-income opportunity shows how innovation is reshaping traditional finance.
One user commented, “Turning lapsed insurance into a fixed-income opportunity shows how innovation is reshaping traditional finance.”
Another user commented, “interesting niche. feels like buying someone else’s patience for a discount. works only if you trust the insurer more than your impulse to exit early.”
A user commented, “Great breakdown! Hardly anyone talks about policy assignments as an alternative yield play.”
“Insightful content! This strategy highlights innovative income options but requires solid due diligence first,” commented one user.
One user commented, “The idea is interesting, but it feels risky for small investors since the money gets locked in and depends on the insurer’s stability. Sometimes, safer options with steady returns work better in the long run.”
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