Surge in sales of Unit linked Insurance Polices (UlIP) by private life insurance companies has proved that public memory is short lived. The UlIPs which not long ago were despised by investors as their invested money shrunk with share market meltdown, constituted almost 65-70 per cent of total sales of these companies in this financial year as market is on record high nowadays.
The UlIPs are the insurance policies in which partial or a major part of the premium provided by the customer is invested in the stock market.
With the opening up of the insurance sector in the year 2001 and advent of private insurance companies these products were preferred by the customers and agents because of flexibility and market based returns. With the meltdown of stock market in the year 2008, the customers and companies began realising the problem with these products as their assets witnessed a huge erosion with decline of share market. After the huge furore the insurance regulator removed all existing UlIPs from the market in 2013 and gave approval to new unit linked products after careful scrutiny. With rally of share market the agents of insurance companies are again selling UPIls in large number. The Divisional Manager of Bajaj Allainz life Insurance Company Navin Srivastava told The Pioneer that the UlIPs have increased the sales of his division by almost 50 percent this year. He said that the new UlIPs are customer friendly and the agents are selling them after discussing everything with the customer.
The public sector insurance company lIC however is satisfied to sell the traditional products. Interestingly the insurance giant does not have any UlIP in its kitty now. The Senior Divisional Manager of lIC Dehradun Ramesh Verma told The Pioneer that the new traditional policies of lIC are getting very good response from the common people. He said that the recently launched products Jeevan lakshya and Jeevan Sangam constitute major share of annual sales this year.
