India Insured

4 reasons why ULIPs score over endowment plans By Personalfn Look at any advertisement for a life insurance product and chances are that it will be for a unit linked insurance plan (ULIP). Such has been the popularity of ULIPs in the recent past that they have outpaced the growth of regular endowment plans. We take a look at the most important reasons why ULIPs score over endowment plans.   1. The power of equity Simply put, ULIPs are life insurance plans, which have a mandate to invest upto 100% of their corpus in equities. While individuals have the choice to shift between equity and debt (explained later in this article), several studies have shown that equities are best equipped to deliver better returns compared to their fixed-return counterparts like bonds and gsecs. And given the fact that life insurance is a long-term contract, equity-oriented ULIPs augur well for the policyholder.   2. Flexibility While ULIPs offer the opportunity to invest upto ...

By Personalfn After being witness to rampant misrepresentation of ULIPs (unit linked insurance plans), the regulator - Insurance Regulatory and Development Authority (IRDA) finally introduced some much-needed guidelines to lend an element of insurance to an otherwise investment product. However, we maintain that there is still more to be done to make ULIPs more transparent and make it even more insurance oriented. First some background - ULIPs made an entry at a rather opportune time for insurance companies. The mood in equity markets was very pessimistic; however, at those levels (BSE Sensex less than 3,000 points) markets could go in only one direction - up. And take off they did in an unprecedented manner. From 3,000 points, the BSE Sensex surged furiously to over 12,000 points leaving investors breathless. Why are we talking of stockmarkets in an insurance article where we propose to discuss the latest ULIP guidelines? Because unfortunately, not just fund managers, ev...