Ulips are second-rate at best, in long term Daily News & Analysis (blog)
“In the long run we are all dead” – John Maynard Keynes
Mutual fund is a short-term product and unit linked insurance plan (Ulip) is a long-term product, almost everyone who draws a salary or some income from the life insurance industry will tell you.
Don’t believe them.
DNA Money ran a test to find out the comparative returns of the two categories of products vis-a-vis the 30-share sensitive index (Sensex) of the Bombay Stock Exchange over a five-year period --- that’s not short-term, one would presume.
Here’s what the test threw up:
Between April 15, 2005 and April 15, 2010, the Sensex generated an absolute return of 182%. In other words, Rs 100 invested in the Sensex stocks in proportion to their weight in the index five years back would have amounted to Rs 282 by now.
Over the same five-year period, 16 equity Ulips that we considered for this exercise delivered an average return of 150% (see table), which is 32% lower than the returns generated by the Sensex. The top Ulip (SBI Life Equity Fund) in the sample returned nearly 242%.
Consumers have benefited over the last 20 years as term life rates have been falling. This was largely due to improved mortality tables and more competition in the industry from the introduction of web-based insurance sales. But that trend changed earlier this year as many companies announced premium increases, largely thanks to the recent credit crisis. With tighter credit lending, insurance companies have had to pay more to borrow money to maintain their required cash reserves. In addition insurers are receiving lower returns on their investments just like the rest of investors, which makes it harder for them to maintain reserves and cover their expenses.
BBC NewsAnd at least 200 million of you with insurance could not get in to see your private insurance plans doctors in 2 or 3 days, even if your life depended on it. WHICH IT DOES! Contact congress and your representatives NOW! AND SPREAD THE WORD! Video: Doctors Weigh in on Obama Health Plan Obama agenda: AMA speech, Korea President Obama's speech to American Medical Association -
Greg Bachand had been selling life insurance for 35 years. He was burned out and tired of the grind. He picked up the phone to call his daughter last June, and stumbled into a different business opportunity. Tanya Bachand was in a pickle.
