POSTED BY May 14, 2012 11:45 am COMMENTS (7)ON
IRDA approves and makes them sell for more than a year and now it call it a useless product and stops.What happens to one who already bought it?
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7 replies on this article “Irda bans products with highest NAV guaranteed LOL”
It happens only in India 🙂 Exactly !
I am looking forward for IRDA to realise that ULIPs is one of their biggest mistake.
Traditional plans are even worse than Ulips, in my opinion.
True. Traditional policies are worse than ULIP. New era ULIPs with a maximum cost of 2.5% are at par with Mutual funds in terms of at least expense is concerned. Thus expenses wise over a long period of time they even out [At a higher level. Arguments that MF expenses ratios fall with increasing AUM is also correct. I am just talking of maximum expense here]
Thus between ULIPs and MF+Term Plan combo the final winner will be adjudged by the actual scheme performance itself. Thus the biggest flip side in ULIPs is not the cost structure but the inability to move to a better performing scheme if the ULIP funds turn out to be dud. You just get stuck in that set of ULIP funds. Whereas if a MF underperforms for a long time you may have a chance to exit and move to profitable schemes. This lack of inflexibility is, in my opinion, a game changer and a good reason to still favour MF+Term plan.
@justgrowmymoney yeah cost will even out at the higher premium rate of like 1 lakh and above where the fixed charges become negligible amount.
I dont understand why was there any other plan other than term insurance in insurance industry 😛
Dear TheZioView, almost all people think that Regulators are there to protect the interests of common men, general public, retail investors, aam aadmi…………blah blah blah.
Reality is extremely opposite.
Regulators are here to protect the interests of the cos. & not the customers. Although from the gestures it looks like they care us – the common men.
Dear TheZioView, such policies are not running for past 1Y alone. In fact the pioneer of such Gtd. NAV ULIPs was none other than SBI Smart ULIP & the product was launched in 2008 end or 2009 start if I recall right after that great crash of Lehman brothers in US of A & our very own indian markets.
To sum up the things – It happens only in India.
The ones who have bought it will not have any impact – management of those plans would continue. But those investments will now be almost 100% Debt based so the ‘guarateed’ payouts can be provided.
The policy flip-flop over the last few months across the nation is costing companies a lot. How can we expect companies to make more and more investment in such a murky scenario.