Best ULIP Insurance Policy

Long-term ULIPs Increasingly Gaining

Favour

• Unit-Linked Insurance Plans (ULIPs) are seen as unattractive for both distributors and investors due to lower commission and volatile equity markets since last few years. And as a result, traditional plans now contribute 80% to the total sales of insurers whereas ULIPs just 20%.

 • The primary reason for traditional products is

doing well is the higher commission structure. However, insurers say long-term ULIPs are increasingly gaining favour.

• Though equity markets might not be very attractive at the moment, single premium ULIPs are in favour.

• In September 2010, the Insurance Regulatory and Development Authority (IRDA) had capped the commissions and charges on ULIPs due to which the average commission as percentage of premium collected fell from about 10% in FY’10 to 4% in FY’12.• Insurers say that ULIPs are not just superior

investment instruments, these also offer insurance cover. Insurers also say that from April, the sector would see ULIPs with longer tenures brought into the market, not just in the insurance space, but in the pension sector as well.

• Insurers say that now customers are approaching bank channel for ULIPs. For long term investors, best ULIPs insurance policy continue to be the best bet. If an investor invest for 15 years or more and have a risk appetite to invest in equity, ULIPs are the best choice. As new guidelines have linked commissions to the duration of the policy, the bias against ULIPs might be reduced, as agents will be keen to distribute these products for better remuneration.

• Source: https://www.policymantra.com/blog/long-term-ulips-increasingly-gaining-favour/

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