Sep 23, 2006 02:36 PM
5461 Views
Very important -- readers pls take note of this
ulips or unit linked insurance plans are nothing but a big scam by the insurance companies.
In ulips they tell you that you get investment cum insurance cover in one product....well this seems too good to be true....well its not true.
The fact is though while opting for this you do get an insurance cover as well as investment, but what about the cost of the insurance premium. All insurace cos. Will give you a very complicated & breif details about the insurance preimum which is generally more in the 1st yr & then a certain amount is detucted every year. After deducting the premium amount from the amount you pay, the balance is then invested in a mutual fund of the same co. Of your choice.
1st if you compare the premium they charge you to a term insurance plan(where u pay premium once in a year- getting nothing back later--just ins cover), you will find that for the same insurance cover you will have to pay less premium then that paid in ulips. Also your balance amount will be invested in a special fund(mostly you get 3 options) where its locked for the 1st three-five years.
so what you should do is get a term insurance plan for the coverage you want & invest the balance amount in a general mutual fund. The benefit of this is that :
01) you are paying less premium then the ulips for the same cover.
02)you can invest the balance amount in any mutual fund of any co. Which is not the case in ulips where ure money is invested only special funds(3 options) of the insurance co.
03)in a mutual fund you can switch to any fund of any comp.
04) in a mutual fund your money is not locked & you can withdraw it anytime.
So my dear friend pls avoid ulips. The reason why no insurance agent will tell you about this and about term insurance is that in ulips they get a good commission while in term ins they hardly get any commission.
