The case of rising Unit Linked Insurance Plans demand

A recent study has showed that there is a 40% increase in younger Indian investors, who seek to invest based on a clear-cut financial plan post the advent of Covid-19, as opposed to earlier when it was sporadic and largely unplanned.

Interestingly, a recent survey by a Life Insurance company indicated that two out of every three i.e. 66.66% of the respondents have said they will invest in Unit Linked Insurance Plans (ULIPs) in the coming year.

The key reasons attributed for ULIPs popularity amongst affluent investors, according to the report was its ease of tracking, relatively low-cost structure over time and the convenience of adding a rider or top-up.  The survey also indicated that ULIPs were popular even amongst the middle-income group, who listed its partial withdrawal facility as the main point of attraction.

The study further shows that while majority of Indian investors especially young investors prefer investing in financial product through SIP, people in their Forties and above prefer lump sum investments. If one goes purely by the content from a search engine’s results, one would carry the notion that Unit Linked Insurance Plans (ULIPs) offered by insurance companies are costlier and lack the same transparency as mutual funds, besides generating much lower returns  after 5 years, which is the lowest installment premium paying term for a ULIP investor.