Did anyone feel cheated by HDFC ULIP or any other? I did. And i want to share more details. Kindly answer.?

Many vital information regarding HDFC ULIP was not told to me. I am looking for more people facing same frustration due to lack of information transparancy. I am planning for approaching Insurance regulator. I want to make my case even more strong from people’s support who faced same crisis in their investment plan.

3 Replies to “Did anyone feel cheated by HDFC ULIP or any other? I did. And i want to share more details. Kindly answer.?”

  1. Sweety.. ULIPs are products that are sold by the insurance agents in a way that the investor is bound to feel cheated.

    Its not just with HDFC, same is the case with all ULIPs.

    Agents promise a certain amount of ‘assured returns’ ; though in reality, there are no such assured returns.

  2. Insurance companies are no longer focused on insuring your life, health & assets.
    They are more eager to manage your investments. Almost 60% of their new insurance sales are ULIPs. Their profitability depends largely on attracting investments in the garb of life cover.
    The most common misconception of retail investors is the belief that insurance is a part of one’s portfolio.

    Following will make you understand ULIPs better:

    Objective of ULIPs: Triple benefit: Life Cover, Tax Benefit and Capital Appreciation.

    Tenure of ULIPs: Minimum tenure of 5 yrs. Max. term depends on age. 3 yrs. lock-in

    Investment amounts in ULIPs: Determined by the investor & can be modified as well, but high.

    Expenses for ULIPs: Agents get very high commission so initial charges are high. Some of them are: Premium Allocation Charge, Risk Cover Charge / Mortality Charge, Policy Administration Charge, Fund Management Charge, Rider Charge. Other charges are:
    Switching Charge, Service Tax Charge, Miscellaneous Charge / Alteration Charge.

    Transparency of ULIPs: Ambiguous on cost structuring, sum assured, terminal benefits, benefit illustrations, term commitment, policy terms etc.

    Portfolio disclosure of ULIPs: Not mandatory. In spite of IRDA guidelines portfolios are not disclosed.

    Fund investment risk in ULIPs: All money goes to the fund of the insurance company.

    Direct investment in ULIPs: Not possible. Only through agent.

    Redemption of ULIPs: On maturity, surrender of policy after 3 yrs. or on death. Surrender after 3 years is very expensive. Different surrender values.

    Returns on ULIPs: Investment amount reduces due to high expenses. Lower returns.

    Options for returns on ULIPs: Only in the form of capital appreciation or insurance cover.

    Modifying asset allocation of ULIPs: Switch overs permitted for free or at a nominal cost.
    No option to switch between companies.

    Tax benefits on ULIPs: Sec. 80C benefits are available on all ULIPs.

  3. Actually most of the funds have underperformed heavilty these days due to financial crisis that the global markets are going through. So most of the people have lost their money investing in equities and mutual funds

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