Deferred annuity plans need caution in investment to avoid mis-selling

Before falling for the promised return, consider the principle of time value of money

Even high-quality investment products can be sold inappropriately. Consider a Nifty index fund, which is typically a low-cost and efficient equity product. If this fund, despite its merits, is marketed for a short-term financial goal, such as an investment horizon of just two months, it is mis-selling.

The writer encountered a similar problem with an annuity product offered by a well-known insurance company. Annuity plans can be an effective income source when purchased correctly and considering the appropriate variant and age. They lock an interest rate for life, a feature not available in other investment products. Additionally, by staggering the