I have to draw a line of not engaging with a commenter at some point, or that’s all I’ll be trapped in doing, so I feel great when I see someone else fight that battle

if you really want to diversify your portfolio, you can use equity funds, debt funds or balanced funds. ULIPs will charge me in the first year itself, and the charges could go as high as 20% (i may be wrong, as they can be even higher). So, if i invest 50k p.a., my total investment actually is only about 40k. It means that i lose 10k and with that, i lose the power of compounding for my 10k. Also, what is the insurance cover i get? A mere 3-4 lacs or so. For 7k premium, i have an iTerm plan for a cover of 70 lacs! You talk about tax benefit in ULIP – Well, if i lose 20% first up, it offsets my tax gain big time. ELSS are way better for tax benefits.
The only reason that ULIPs are sold in India is that it gives the agents a handsome commission. That’s why you see every neighbourhood uncle and aunty, who don’t even know the “F” of Finance, line up to sell you one. I could go on and on criticizing ULIPs and mentioning the benefits of MFs. But have to keep the space and time constraints in mind!

P.S: Nothing personal, but i’ll never want to have you as my financial advisor

I completely understand your concern as Being a research scholar I know that though literacy rate in India in last few decades has gone up the financial literacy still remain as a matter of concern.

When it comes to deciding about our spare money, still we prefer safe investments like BANK FDs, bonds, money market instruments etc.
As a investor we look forward for -

Best Value for our money
With in Short duration of time
And with least cost and inconvinience

And for advice on investing or saving our money till date we depend on DATA from reliable and unreliable sources. This is one of the reason that Share market is highly speculated in India. How can another person understsand what I want, what are my financial goals, my financial plans….Its an individual who should be deciding about it. Then comes the role of a financial consultant or planner in picture.However in this whole episode we forget the three golden rule of investing –

Higher the capital higher the return
Longer the term of investment or saving higher the return
Higher the risk, higher the return.

You probably wouldnt have heard or read abour any single article about ULIP, reason u must be knowing wel, however in todays time with drastic shift in ULIP pattern and structure, its certainly one of the best instrument to cater demand of masses. Its uncomparable and unbeatable.

There’s no point of comparision between ULIP and MF as they both are seperate instrument and hold different place and importance.

If you have to travel within city limits what will you prefer – Auto or VOLVO
If you have to travel from one city to another what will you prefer – Auto, taxi, VOLVO, Train, Plan….

You will see that with distance the choice increases…and so do the confusion. See its very simple investment or saving your money in any avenue is individuals choice however as an investor or saver one must first ask -

Where I have to reach and in how much time I have to reach. These two question will help you to decide you shud go for ULIP or for MF.

Thanks and Regards

Shweta
7666366406

This morning, I was discussing the same thing with my friend.

I haven’t seen a single positive article on ULIP till date.

If your motive it insurance, go for termm plan and if investment go for mutual fund.ULIP serves none in its best sense..

I have read loads of stuff on term insurance plan and endowment plans.

Lately, online insurance policies is making lot of noise. I am also sharing one of the link on that. Also, it would be great if you can do a post on comparison of online insurance premium chrged by all the operators.

http://economictimes.indiatimes.com/personal-finance/insurance/analysis/new-insurance-plans-with-low-premiums-what-does-this-mean-for-you/articleshow/7123089.cms?curpg=2

Thanks in advance

Amit Khandelia

Read the complete article – http://www.investmentbazar.com/ulip-info-for-every-investor/