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Our Readers' Feedback On The ULIP Affair

Read interesting feedback from our readers on SEBI's ULIP action

 Bipin Sachdev wrote

Going through your article on SEBI's clamp on ULIPS, what happens to existing customers?

A) Should they come out of ULIPS even at a loss?
B) What kind of insurances are best for us?

M K Tewari wrote

It is an excellent step in the right direction. SEBI should also think about regulating the trailing fee charged by AMCs from investors. The fact is that once the units are allotted to an investor the distributors do not take any interest. They are sure the trailing money will always be passed to them by the MFs. it should be mandatory for agents to take a certificate from the investors annually before the trailing money is credited to their accounts.

Manish Das wrote

I am also an Insurance Advisor & Mutual Fund Advisor, I always feel that the insurance and investment both are different requirements of the person so it must be available as two products and not in blended form, because people are not considering their life security feature as main feature but they give more attention to this product only for investment.

First of all we have to give proper life coverage to our investor with decent return (only conventional not market linked) and then further investment for risky game (ULIP/MUTUAL FUND/SHARE etc.) because a healthy conventional product's investment may utilize for long term infrastructure growth but also preserve their hard earned money with moderate growth.

Jamiluddin Chishty wrote

I personally welcome this move by SEBI to ban ULIPs. ULIP is nothing but legalized cheating. They take a large chunk of the money & also lock them and then come blackmailing for premiums, otherwise policy will be lapsed.

Our large population does not understand financial jargon and they take advantage of it.

Akash Halder wrote

I also welcome SEBI's move to crack down on ULIPs. I was fed up of TV and newspaper ads of ULIPs with guaranteed returns and always advise my friends not to invest in these instruments as returns cannot be guaranteed anyway. Whatever be the decision between SEBI and IRDA, I hope that benefit of the customers will be top priority.

S Sethuraman wrote

Read your comments on VR online and earlier also I have seen your comments regarding ULIPs. Looks like a significant step but within 24 hrs IRDA and the insurance companies are gearing ahead to fight it tooth and nail. All along Mr Dhirendra Kumar was maintaining a distance and giving a cautious warning to investors regarding the ULIPs. This product has a lot of hidden costs which is never told to an investor and the brokers market them at their will to get the hefty commission. In fact, nobody will be able to explain what is in a plan. So far I never got lured into this product. First year some 30 - 35 % goes as different charges followed by a reduced percentage every year. If life cover is there then much more charges. With all this charges what will be the final market value? Still our people will never learn and blindly go behind this mafia.

First ULIP was launched by UTI years back without any such loads. I had seven of them and got almost 16 - 18 % annual returns on 10 and 15 year plans. Without any loads all my MF products are giving me around 16 to 22% annual returns and tax free dividends. There is no life cover on these but for that there are clear cut term insurance plans. Most of my LIC plans have given me very good returns and prompt redemptions on time.

There are experts like Mr DK to point out the anomalies and finally SEBI has thrown a spanner but to what extent? Every other day a new product is launched with the latest best of 7 years NAV that too for a price!!!! Real mockery of the system and things like that. What will be the final outcome of this order and the pressure tactics to follow along with this order are going to be the news for the next few days. I hope something better will happen to the lured investors.

Ramganesh Iyer wrote

This is great news. Unfortunately, the IRDA has not lived up to its expectations of protecting consumer interest and regulating ULIPs in a transparent manner. Indeed, it has often acted as an insurance company association itself! This has forced SEBI to step in and try to bring some sanity to the situation. All right thinking consumer groups, the mutual fund industry and other players should welcome this move and support SEBI in its endeavour to clean up the insurance industry. The aim should be to make the insurance industry match the world-class equity and mutual fund industry that the SEBI has helped develop in India. About the performance and future of IRDA – the less said the better.

Ketan Patadia wrote

The news of banning ULIPs of many private Insurance companies, they may be culprit in view of law (SEBI), but here I want to know why LIC is not clutched for the matter? Are private insurers alone not following the rule? Or LIC is untouched due to its government shelter while LIC also sells these products.

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