What are the risks of investing in ULIP plans like profit plus and money plus?

Question

i need to know about the risk factors,i should consider while chosing the plan.I am prefering to invest with LIC.

Answer 1

People book profits or switch to a safer option in a bid to play safe. But while that makes sense for those dealing in shares or with mutual funds, does it make sense for those having equity unit linked insurance policies (ULIP)? ULIPs allow you to switch from equity fund option to debt, usually without any fees. But there is a key difference between ULIPs and other stock market investments. ULIPs are a combination of insurance and investment. Since it is your protection cover that you would be tampering with, your decision to switch needs to be well thought out before you exercise it.

For more on this read >> http://wealth.moneycontrol.com/showstory...

All the best!

Answer 2

risk factors are minimum. go ahead with your investment.

Answer 3

Savita,

Investing in ULIP give you the same risk investing in equities. ULIP funds are directly connected to stock market. ULIP is a plan to provide insurance as well as investment exposure for long term investor.

Buying a ULIP is nice idea. You have to continue paying the premium through out the term year by carefully selecting the ULIP by considering its costs and performance. Don't be cheated with agents words.

ULIP is very good for long term. I can help you to select a best one. Use the contact form in my blog to contact me.

Answer 4

therevare very less or no risk in ULIP plans.... ulip plans are unit linked.. i.e the money which is invested by u is invested in units in many companies and it is depending on market....many companies are gining you bond that they will gve you 15-20 % ROI (rate of interest) per year minimum... there many plans who are providing you 8-10% ROI? month.. for more contact  [e-mail]

Answer 5

Investing in ULIPs is not a good idea -whether it is from LIC or Birla Sunlife or anyone else! ULIP is the highest selling financial product in the country. But unfortunately it is also the most mis-sold product. No agent will ever tell you that the upfront costs are as much as 30% in the intial years. So out of say Rs.10,000 that you invest, Rs.3000 would go towards agent comission, fund management charges, admin charges, etc. etc. That implies only Rs. 7000 is getting invested in the market! If you understand the compounding effect of money (if not read this article Power of Compounding at

http://www.valueresearchonline.com/story...

you will realise how big a financial cost is thus hidden from you.

Next whatever insurance life cover you are getting can be had at approx. 1/10th the cost thru a separate Term Plan cover. Read why Insurance and Investment should not be mixed here at

Investments? Insurance? Or both?

http://www.personalfn.com/detail.asp?dat...

Insurance vs Mutual Funds

http://www.valueresearchonline.com/story...

Now that you are more educated on how there are far better financial instruments to multiply your money (and separate Term Plan covers to take care of Insurance needs), you know that ULIP is not what you want to go with, certainly not for next 15 years.

For getting a complete perspective on why so many are discontinuing high-premium ULIP policies (that they mistakenly sigh!ned up for), even at the cost of losing some money, consider this earlier question and the answers therein! http://in.answers.yahoo.com/question/ind...