Soundararajan V wrote
I fully agree with your view on ULIPs. It has been a day loot by insurance companies with the help of their Munnabhai (IRDA) and they have already looted the hard earned money of financial illiterates. Private sector banks are selling ULIPs more than their own product i.e fixed deposits. The main reason for the same is to boost their fee-based income. These ULIPs are sold by sales guys of banks who do not know the difference between insurance and investment. Most of these salesmen were earlier selling FMCG or soft drinks.
Very few people know that ULIP is a long term product and the holding period to make decent return is minimum 10 years. However the sales persons were selling ULIP as three year products (after October 2009 as 5 year products).
First time I have seen an idiotic regulator issuing advertisement to induce the public to buy the products which they are regulating, that too when the matter of regulating authority between SEBI and IRDA (Idiotic Regulator with Deep Arrogance) were under discussion.
The Finance Minister should step in this issue and remove Mr. J Harinarayanan from the IRDA chief post with immediate effect.
FM sir, do not wait till Monday April 12, 2010, If you wait this IRDA (Indecent Regulator Disobeying Authority) will continuously issue press statements and idiotic advertisements.
Note: I never invested any money in ULIP and also request every citizen of India to refrain from Investing in ULIPs till it is regulated by a decent regulator with investor interest in mind.
Sanjay Jain wrote
The battle of ULIPs is now a proof of the mess being the financial sector. The ministry of finance is the main culprit who gives permission to carry on trading and one fine morning, SEBI declares it’s dictatorial.
Now IRDA has to challenge this. But to me, as an investor in ULIP plans I feel cheated by the government. Why does not the government plug loop holes before more than Rs 100 crores are invested in ULIPs? Why are the LIC ULIP plans not challenged by SEBI? Why the double standards or is it a process initiated by some people with vested interests?
SEBI gives permission to companies to raise money from IPOs, when these companies vanish does SEBI take any action other then debarring the entity from the markets?
Tarun S Bangari wrote
This is great news! Congrats to SEBI for taking the bull by the horns. The bull, in the form of IRDA and all the insurance companies who blatantly continue to push ULIPs, had to be taken on head-on. Hopefully this order will not be overturned by the Finance Ministry or some other higher up government body, in case IRDA and insurance industry cartel go out for seeking ‘justice’.
Mahesh Jagdish Manghnani wrote
Thank God that SEBI took such a brave step. Even though it is the responsibility of investors to see where they are investing their hard-earned money, but let’s not forget that a majority of agents are either their friends, family members or references. So, normally hardly anybody takes efforts to study in detail the pros & cons of that investment. That’s why people need to understand that ULIP’s are nothing but a big spot in their financial planning.
Now, it would be interesting to see if the regulators remove the entire commission-based structure in the insurance industry, just like mutual funds & introduce the structure ‘ Professional Fees ’ for agents.
Suhas Vyas wrote
This is really a welcome step taken by SEBI in interest of the general public. ULIPs are mostly designed to get maximum benefit to insurance companies and agents.
The insurance component is very low and it does not serve the purpose of family protection. Investor pays his money for policy admin charges, allocation charges, fund management charges etc.
Hence insurance companies should take approval for these charges from SEBI.
Krishnan AV wrote
A welcome move by SEBI. ULIPs should have been banned much earlier. It is a weapon capable of mass destruction of personal wealth of those who opt for it.
Deepak Singh wrote
I am very happy after this. At least some regulatory body is really working for the common investor. I made a wrong decision by buying ULIP of about Rs 7 lakhs p.a. in various companies because I found the fund managers of ULIPs to be giving more returns than mutual funds. Moreover, I wanted insurance cover, since the statement, etc came so late, after about a year & half, it was too late for me to find the losses & demerits in ULIPs.
It is good if my future premiums will be diverted more to markets in NAV rather than hundreds of hidden expenses, which is there in almost all companies.
Moreover, these ULIP companies also do not correct their mistakes. Even IRDA control on them is minimal. I had an instance where I wrote to IRDA thrice but at the end of the day I only bear the blunders which these people keep repeating.
R.Varadarajan wrote
At last SEBI has acted in the interest of the hapless investors. It would have been better had this order come 5 years ago. The ULIPs are actual a rip-off with very high charges - as much as 25% of the average Premium in the first 3 years. This is cleverly manipulated and misrepresented to the clients at the time of selling. The IRDA Chairman on his own should have requested for registration of these products with SEBI - when these irregulaties would have come to light. Obviously everyone wanted to avoid and continue as usual to please the insurance companies. It appears that the IRDA Chairman actually functioned as a President of the Association of Insurance Companies, rather than a regulatory authority to look after the Policy Holders (in many cases, investors). What is the point in shedding crocodile tears for the Policy Holders now!!!
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