ULIP's NO NO!!

ULIP is an insurance cum investment product... But for me its neither a good insurance nor a good investment choice... ULIP's are bad when you don't understand them..

Almost all Insurance companies and agents are hell bent on selling them..why? Simple..

• Agents - Get more commission
• Companies - Charge you Premium allocation charge, mortality charge, fund management charge, Policy administration charge etc etc..

After all these left out money is invested to grow and on top more the insurance cover required more you have to spend on premium..
Say for an annual premium of 25K you would get 5lakh insurance for 20 year period with most current ULIPs.

Instead, out of the 25K on ULIP if you put

• 6-10K you will get term life insurance for 50Lakh!(based on your age and selecting pure term plan)..
  
• Rest of the 15 K if you do Systematic investment plan in 3-4 diversified equity Mutual funds (Select 5 star rating fund) for 20+ years you will see the compounding effect of your investment ( Compounding is 8th wonder of the world). After 20+ years you will end up with big retirement corpus !!

ULIP does the same kind of investment for you indirectly. Don't you think you could rather do it for yourself and get double the returns, have a big life insurance cover and save a portion of the money ending up as charges?