Why ULIP plans are one of the best modern day investments?

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Why ULIP plans are one of the best modern day
investments?
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• Every successful person aspires for more money.
  They invest in various tools to book high profits
  good returns. During your investing age you
  nest your money in various equities, debt fund or
  mix funds so that you extract maximum returns
  from the markets and secure your future. Of the
  various investment tools, ULIPs are one good form
  of investment channel that will not only help you
  gain good returns, but will also cover you safely
  during this race of earning money in life. Many
  insurance companies come up with advertisement
  provoking customers to invest in ULIPs that offer
  returns on the highest Net Asset Value (NAV)
  during the policy term know as Ulip NAV

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• A NAV value is calculated by adding the ULIP fund
  holdings as on a particular day deducting the
  liabilities like management fees, operational
  costs and other permissible expenses and charges.
  It represents the value of the total holdings of
  the ULIP fund. Most investors think higher NAV
  products as being expensive and may choose not
  to invest in these funds. They prefer for lower
  NAV because of lower costs associated with it.
• However, lets understand that NAV is merely the
  book value of the ULIP fund investment minus
  expenses. It neither inflations nor
  misrepresents. ULIP represents the fair price of
  its assets should the mutual funds liquidate all
  its investments on that day. So, investors dont
  have to be concerned about the price being too
  high or low. Higher or lower ULIP NAV has no
  significance and should not be on the basis for
  deciding upon the kind of fund you may opt to
  choose for.

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• Most finance companies use an investing strategy
  called dynamic hedging or constant proportion
  portfolio insurance (CPPI). Under this, the fund
  manager will constantly reallocate money between
  debt and equity fund classes for maintaining
  previous highest NAV.
• Over the year, if the equity market goes down,
  your capital stays held because of the bonds you
  have. Eventually, when the market goes up, you
  will see the NAV rising. In a market with no
  volatility, the average graph of the product will
  improve as the NAV will go up in a linear manner.
  Each time when the market falls the debt part of
  your portfolio hold bonds that ensure the highest
  NAV at maturity. So over a period of time, your
  portfolio in equity may become smaller and
  smaller and would move towards a pure debt fund.

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• Previously, insurance companies did launch
  products which had minor difference from its
  existing product with different names which
  created confusion among policyholder. To end this
  wrong practice IRDAI in its circular said that
  before approving any proposed product it has to
  be certified that new product is not just a minor
  modification of existing product. These
  guidelines become very important in the light of
  speculations surrounding around highest Best Ulip
  Insurance Plan guarantee plans as they contribute
  20 of total ULIPs sales. Such products give
  emphasis on debt and in the case of equity
  markets it can trigger further sell- off.

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