Saturday, April 10, 2010

Prashant Saran of SEBI bans ULIPs temporarily

Prashant Saran of SEBI bans ULIPs temporarily

Prashant Saran of SEBI bans ULIP - Unit Linked Insurance Policy companies temporarily. These companies include

  • Aegon Religare Life Insurance Company Limited
  • Aviva Life Insurance Company India Limited
  • Bajaj Allianz Life Insurance Company Limited
  • Bharti AXA Life Insurance Company Limited
  • Birla Sun Life Insurance Company Limited
  • HDFC Standard Life Insurance Company Limited
  • ICICI Prudential Life Insurance Company Limited
  • ING Vyasa Life Insurance Company Limited
  • Kotak Mahindra Old Mutual Life Insurance Limited
  • Max New York Life Insurance Co. Limited
  • Metlife India Insurance Company Limited
  • Reliance Life Insurance Company Limited
  • SBI Life Insurance Company Limited
  • TATA AIG Life Insurance Company Limited


These companies are ordered
not to issue

  • Any offer document
  • Advertisements to sell these ULIPs
  • Brochure soliciting money from investors or
  • Raise money from investors by way of new and/or additional subscription for any product (including ULIPs) having an investment component in the nature of mutual funds, till they obtain the requisite certificate of registration from SEBI.


For complete details of order click here

ULIP means Unit Linked Insurance Policy. A ULIP is a life insurance policy which provides a combination of risk cover and investment.

Are Investment Returns Guaranteed in a ULIP?
Investment returns from ULIP may not be guaranteed.” In unit linked
products/policies(ULIP), the investment risk in investment portfolio is borne by the
policy holder”.  Depending upon the performance of the unit linked fund(s)
chosen; the policy holder may achieve gains or losses on his/her investments. It
should also be noted that the past returns of a fund are not necessarily indicative
of the future performance of the fund.

The portion of the premium after deducting for all charges like

  • Premium Allocation Charge
  • Mortality Charges
  • Fund Management Fees
  • Policy/ Administration Charges
  • Surrender Charges
  • Fund Switching Charge
  • Service Tax Deductions
  • Premium for risk cover 

is utilized for purchasing units. It is popular in India because agents are being given hefty commissions, also there are pyramid like schemes to sell these schemes. Retired government officials and professionals are being used by the insurance companies to sell these products to friends and family... You will be asked to join health/life ULIPs rather than a mutual fund because the commission for ULIPs.

2 comments:

metmarketing08 said...

what is the most common mis-selling in ULIP products?

Venkat said...

Know the importance of insurance if you have dependents and have not much assets. Go and buy adequate term insurance and secure your family and then go on to invest and build assets.

Now there is logic in this method. But money is not always maths. Getting nothing back after at the end of the term is not digest-able to most of the Indians and that is why they buy ULIPs.... nothing more nothing less.