“No ulip has given REAL returns in the past 10 years” – said one analyst.

I have no clue about the accuracy of this statement. His argument was even for those who started in 2002 and were in the boom, only HALF their money participated in the boom (thanks to the high charges).

When the ULIPs were launched in 2001-2, the mutual fund industry was already 15 years old (other than UTI). This industry had a nice set of rules and regulations -and all that IRDA had to do was to do a cut paste of the MF regulations of SEBI. However regulator egos may have been at play, and this did not happen.

One simple Mutual fund requirement that all fund houses will launch schemes only at Rs. 10 NAV was also not an IRDA requirement. And financial power houses who claimed to be the paragons of virtue also took advantage of this to launch their schemes at a higher NAV. Even today I know people who are happy seeing their NAv – without realising that it started at a different place!

So if somebody tells me that no ULIP has been able to give a REAL return it is easy to believe because there is no single website which tracks ULIP performance. I can also understand why such sites are missing – there is no mandate by IRDA for a monthly or a quarterly disclosure of portfolios.

However it is high time that disclosures started. Given the higher sales commissions, and the fact that tied agencies can SELL ONLY their own ULIPs, ULIP sales have increased dramatically. Icici Pru has an aum of Rs. 40,000 crores – far higher than many mutual fund houses – and it is growing. I do not have the figures of other ULIP schemes or of other insurance companies – but I am convinced that the EQUITIES with insurance companies COULD be bigger than the EQUITIES with mutual funds (and this I am saying without including LIC’s booty)….

Hey regulator can we have some disclosures please?

With such fantastic ULIP sales, I am wondering which business will pay better:

– Financial literacy programs (at least my children should not suffer!) or

-Law practice – to bring class action suits?

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  1. I squared off my ULIPS when I saw the atrocious admin charges ages ago.
    On an unrelated note, what is your view on the recent approx 300% rate increase in NRE deposit rates by various banks? Does it offset the rupee to dollar devaluation and seem like a good option?
    Worth an analysis, I think.

  2. Made the mistake of investing a lot of money in ULIPs. It’s been nearly 4 years; next year hopefully we should see a new high and I am planning to exit all these duds.

  3. ULIPS r most missold products!
    plz any person with sound mind DO NOT BUY ULIPS!
    stay away from them!
    they hv high commissions 30-40%even more, highest guarantee NAVs r worst products, stay away!

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