Wondering about the relevance of ULIPs? Probably it is time to rethink!

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ULIP Insurance India
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Wondering about the relevance of ULIPs? Probably
it is time to rethink!
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• In the recent times, there has been a lot of
  talking and discussion about Unit Linked
  Insurance Plans. The discussions took place not
  because they are the new in thing,
  unfortunately. It is the contrary that has been
  the topic of discussion.
• Past trends
• Till now what you have read and heard about ULIPs
  has been different, however, finance happens to
  be an industry that is ever evolving and there
  are no final rules to make a great investment. If
  you are about to touch a point where you have
  completed the three years cap on your ULIP, you
  must read further, and if you are thinking about
  investing in one, it is as important for you too.
• The blockbuster or the bestseller that
  insurance industry has is this product. So far it
  has been the most popular choice for investors
  but is it necessary that the most popular is the
  best too? Not always!
• Why do you invest or buy insurance? To have an
  investment policy or insurance that suits all
  your needs. A policy that is a mix of both may
  not be the answer.
• These five points will help you make a choice
  easily.

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• Cost
• In the first few years of your plan, the cost of
  servicing is high in ULIPs. It may be anything
  between 15-25 percent, i.e. for an investment of
  Rs100, 000 you may have anything between
  35,000-85,000 as actual investment. This makes an
  expensive policy.
• Changes in cost
• The cost of insurance rises with the age of the
  investor. If the mortality charge is Rs A when
  you are 25 years old, it may go up to Rs 2A when
  you are fifty. This is informed to the investor
  only when he has bought the policy. It looks like
  a trick, truly speaking.
• Fee and charges
• The fees and charges that a company charges is
  divided under various heads. It is very tricky
  and lengthy to understand and you end up paying a
  huge amount as the fee and less as an investment.

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• Fund management
• In any kind of equity linked investments, fund
  management holds the key to remain healthy,
  however, to our surprise we have never seen the
  best fund managers in insurance but in mutual
  funds industry.
• Rigidity
• The biggest hassle in insurance policies is that
  the investor cannot change the mode of investment
  or change funds in case it doesnt do well or
  doesnt suit the investors needs. This is
  however available with other investment options
  as you have the arrangement to switch. Dont we
  all like a flexible arrangement rather than a
  rigid one?
• Whats best to do!
• It is generally advised to keep your investment
  and insurance separate as they have different
  behavior and scope. As your wealth goes up, your
  insurance needs go down but your investment needs
  go up, for example. How can you have something
  that behaves so differently from the other?

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