In India, banks are allowed to act as distributors for various investment products, including insurance schemes and mutual funds. There are cases where investors register a loss of principal when exiting insurance schemes. A similar loss of principal from mutual funds through the same modus operandi is less probable. You can argue that people can be suckered into buying equities when they are at a high, but still this cannot be compared in scale to insurance products masquerading as investments. After all, with insurance products, you get a free look-in period of 15 days to return the policy and get your money back. The performance of the product won't be visible to you, until much later. For an investment that is not liquid (holding period is often 3 - 5 years at a minimum), you end up in a situation where you are trapped with the product. You are then left with a few choices: