As
the buoyant Indian stock markets are growing in leaps
and bounds, a keen interest has been shown by all
kinds of investors to participate in this rally. Mutual
funds are taking advantage of this scenario and increasing
their customer base by launching many new fund offers.
The insurance industry too is coming out in a big
way with products like Unit Linked Insurance Plans
(ULIPs).
Of
late, ULIPs are gaining in popularity among various
insurance schemes on offer as they provide varied,
flexible fund options based on individual investors'
risk appetite. Capital Guaranteed ULIPs is one of
those options which is targeting conservative investors
who want to take advantage of the booming stock markets,
but do not want to put their base capital at risk.
Insurance agents mis-sell these products without explaining
the features properly. A close look at them does not
present a very happy picture.
Till
recently, insurance policies were perceived by policyholders
as only tax saving and pure risk cover instruments.
But, with the launching of ULIPs, this perception
has changed significantly. Factors like declining
interest rates and competitive premiums are driving
investors to consider investments in ULIPs, which
offer higher returns. ULIPs are usually termed as
best of both the worlds as they offer market-linked
returns along with the benefit of risk cover.
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