When we loosely use the term Life Insurance, it automatically covers two components. INSURANCE and ASSURANCE.

The plain vanilla insurance needs are covered by TERM policies which just offer risk cover and no other benefits.

Other traditional policies will cover the insurance as well as assurance components. Here the returns on the assurance side are guaranteed apart from risk cover. Normally these returns are not great – more or less in line with the returns offered by the GUILTS.

All the insurance companies have actively promoted ULIPs for last 5/6 years. These are equity linked products and assurance is dependent on the equity market as well as fund manager’s performance over period under consideration. THERE IS NO GUARANTEE WHAT SO EVER.

Lot of mis-selling has happened in the ULIPs in the past and the norms are tightened  from 1st September 2010.  We will strictly discourage  selling ULIPs to any individual unless he / she has life cover – thru term insurance -  at-least 10 times his/ hers last annual income.

IRDA  should make this solemn pledge an integral part of their training module for advisors. They could even think of making an affidavit to this effect mandatory before taking any other traditional / ULIP insurance plan.

We are currently in the process of enrolling IRDA approved insurance advisors on all India basis at different geographic locations. Do send in your resume if you will be interested to offer these services to our subscribers.

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