AN educative sounding pitch for ulips..the pitch is hers, the humor is mine.


Unit linked insurance plans (ULIPs) are a category of goal-based financial solutions that combine the safety of life insurance protection (see I always told you, they want to protect life insurance, not your life!!)

along with long term wealth creation opportunities (she is not clear for whom). In ULIPs, a part of the premium goes towards paying my commission, paying the nice fat salaries of  the employees, paying for the administration costs,  providing you life cover &the remaining portion is invested in fund(s) which in turn is invested in stocks or bonds. The value of investments alters with the performance of the underlying fund opted by you. Of course the amount of money that we invest is so less that the variation is negligible. Because the amount itself is negligible.

Simply put, ULIPs are structured in such a way that the costs, charges, life protection element and the savings element are distinguishable, and hence can be damaged according to our specific needs.

Why do I need ULIPs?

Frankly, YOU do not need ULIPs, I need YOU to buy them, and buy them now. Our company is doing very well because the bank is able to find new clients regularly, but the lapsation rate is high and that will hurt our long term profitability. We need to go public soon, so our sales book and the aum amount need to look good. However there are the following reasons which will make you believe that YOU need ULIPs, they are:

Freedom to choose your life insurance cover: In a unit linked policy, you can choose the extent of life insurance cover that you can enjoy (you always enjoy the cover, your spouse hopefully will enjoy the claim). In most ULIPs, the minimum life insurance cover that you get is 10 times the annual premium. The upper limit can be as much as 100 times of your annual premium or even higher, depending on the policies of the insurance companies. I am sure you heard about the ULIP policy where a client paid Rs. 50,000 as a one time premium and after 5 years the policy was worth Rs. 1240. The high court ordered that his money should be refunded. So you are really protected, if we do not pay your claim, your spouse can get it from the court, but of course you will have to die first. 

Freedom to choose your investment type: Depending on your investment preference, unit linked insurance plans allow you to invest in various asset classes like equity, debt or money market. Whats more, you can switch between these asset classes seamlessly with almost no charges. Actually the money invested will be so less that the switching will not matter at all. 

Flexibility of additional investment: In ULIPs, you can anytime invest an additional amount, called top-up, at a very nominal charge to enjoy the benefit of greater savings. It will help keep your plan alive, hopefully.

Liquidity: ULIPs have a partial withdrawal option, so that you can withdraw your money in case of emergencies. These partial withdrawals are usually free of cost.

Goal based planning: ULIPs are structured to help you secure your key goals such as Retirement planning or saving for your childs education. So, apart from the life insurance benefit and the advantage of investments, ULIPs also give you the added benefit of knowing that your premium is working towards securing your future goals. I would suggest that you pay about Rs. 100,000 as a ULIP premium and also put Rs. 100,000 in PPF. After all some money of yours should be safe from our fund managers too. Some of them are too damn aggressive. One guy almost broke the bank. Thank fully he is no longer a fund manager, we elevated him to a higher post. Now he cannot damage your portfolio, unless he gets demoted. I hope he does not become a fund manager again.

Tax benefits: Apart from protection and savings, unit linked plans also offer tax benefits. Not only you can claim the insurance premium paid towards reduction from your taxable income, the maturity benefits are also completely tax free, as per prevailing tax laws.

To know more about the Plans kindly call back @ Mobile No.

Not keen to provide her mobile number….

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  1. Hdfc click to invest
    They charge only mortality and fmc @ 1.35%.

    But is for avaliable only for online customers

  2. sanjay jhunjhunwala

    KIndly advise on HDFC Click 2 Invest.

    This ULIP plan has low management charges (1.35%), no allocation or policy administration charges. Total including mgmt chrges and mortality, serv tax will come to less than 2 %. Unlimited switching without entry/exit load. EEE tax treatment for 5 year premium payment plan. Can buy online only as it is not commissionable.
    Will highly appreciate your comments
    Thanks and regards

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