The Insurance Regulatory and Development Authority ( IRDA) wants insurance companies to go slow on ULIPs ( Unit Linked Insurance products), especially semi-urban and rural areas. The immediate trigger for IRDA' s action emanates from public complaints , which stated the distributors had been mis-selling these products.Many unsophisticated investors were lured with offers of 30 percent - plus returns.- Source BW.
IRDA , at last has come with some step against the ULIPs. Ulips are a products are definitely costly products and not the best of the breed investment tool as such. Many plans were sold as 'top performing ULIPs' by showing the returns generated during the bull run. Still equity inflows into markets through ULIPs are sizeable when compared to investment through SIP in equity MFs. This is primarily because of the lack of awareness among the investors about the costs involved with ULIPS. Hope IRDA tightens it act further and frees the innocent public from the clutches of mis-selling insurance agents.
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