ULIPS who is to be blamed?

ULIP (Unfriendly Loss-making Illiquid Plans) is a comment I saw about this scheme and many times I have faced many question by investors of ULIPS when I have been live on SUNNEWS. So I felt government and other agencies were slow to protect investors and now comment from FM that financial product should not have entry load is the right start, but still long way to go many reform has taken in equity market and now in financial product also and any reform will have some setback. From this month our saving account will have 3.5% as interest rate and common man profit is loss for banks.

This is a tricky issue ULIPS were started long back when insurance was not familiar so LIC agents were used effectively to bring masses under insurance and to develop habit of saving with life cover in lower income group but over a period of time Indian stock market started to give 30% annualized return so mis-selling and entry of private player complicated the issue. Stock brokers found selling ULIPS as lucrative business and many private schemes was Miss-sold aggressively where Rs.10, 000 invested 40-50% was eaten away and only balance is invested. So who is to be blamed? When MF doesn’t have an entry load and transparency has come ULIPS also should mention beforehand how much the broker/intermediaries are going to get. So SEBI is right in protecting investor in my view but I don’t understand why IRDA can’t implement faster rules to bring transparency in ULIPS scheme.

http://www.sebi.gov.in/Index.jsp?contentDisp=WhatsNew  SEBI in its circular said today that ULIPs launched prior to April 9 will continue as usual but ULIPs launched post April 9 will require Sebi approval.

http://profit.ndtv.com/2008/12/05155501/Indias-best-ULIPs.html  They are the least understood yet most invested product in this country- ULIPs or Unit Linked Insurance Policies.

What is a ULIP?

A United Linked Investment Plan (ULIP) is an instrument which combines the security provided by an insurance plan with the opportunities provided by an investment plan.

ULIPs (Unfriendly Loss-making Illiquid Plans) - they are no better than these http://www.bankbazaar.com/guide/ulips-–-better-as-a-long-term-investment-option

http://www.bseindia.com/cirbrief/new_notice_detail.asp?noticeid={70428174-F568-40DF-9E90-30AE1DC3E9FB}noticeno=20100412-23&dt=4/12/2010&icount=23&totcount=23&flag=0  The under mentioned scrips will be included in "T" Group and they would be traded and settled on Trade to Trade basis w.e.f. April 19, 2010 and would attract a circuit filter of 5% or lower as applicable.