Posted on March 21, 2010.
Has anyone felt cheated by HDFC ULIP or any other? I did. And I want to share more details. Please responding. Many vital information HDFC ULIP has not been said about me. I'm looking for more people experiencing the same frustration with the lack of transparency of information. I intend to approach the regulation of insurance. I want to make my case even stronger support from people who faced the same crisis in their investment plan.
Insurance companies are more focused on life insurance, health and active.
They are more interested in managing your investments. Nearly 60% of their new insurance sales are ULIP. Their profitability depends in large part to attract investment in the suit cover life.
The most common misconception of retail investors is the belief that insurance is a part of its portfolio.
Following you will understand better ULIP:
Objective ULIP: triple benefit: life cover, tax benefit and capital appreciation.
Time ULIP: the minimum length of 5 years. Max. term depends on age. 3 years. lock-in
amounts of investment in ULIP: Determined by the investor and may be changed as well, but high.
ULIP charges: Commission Agents get very high initial costs are high. Some of them are the following: Premium Allocation Charge, Risk Cover charge / load of mortality, policy administration charge of fund management charge, charge Rider. Other charges are as follows:
Load switching, head of tax services, other services / load alteration.
Transparency ULIP: ambiguous on the cost of structuring, the sum insured, terminal benefits, benefit illustrations, long-term commitment, political conditions, etc.
Disclosure ULIP portfolio: not mandatory. Despite portfolios IRDA guidelines are not disclosed.
risk investment in ULIP Fund: All money goes to fund the insurance company.
Direct investment in ULIP: Not possible. Only by the agent.
Redemption of ULIP: At maturity, the surrender of the policy after 3 years. or in case of death. Transfer after 3 years is very expensive. Different values of redemption.
Returns on ULIP: Amount of reduced investment because of high costs. Lower yields.
Options for ULIP returns: Only in the form of capital appreciation or insurance coverage.
Changing the asset allocation ULIP: Switch off allowed for free or at nominal cost.
No option to switch between companies.
Tax benefits on ULIP: Sec. 80C benefits are available on all ULIP.
Sweety .. ULIP are products that are sold by insurance agents in a way that the investor is required to feel cheated.
This is not only with HDFC, even in the case of all ULIP.
Agents promise a number of "guaranteed returns", although in reality there is no such returns assured.
In fact, most funds have underperformed heavilty these days because of the financial turmoil across global markets. Thus, most people have lost their money investing in stocks and mutual funds
