Insurance regulator IRDA on Saturday said that ULIP policies, under which a portion of funds is invested in the stock markets, are safe and secure. “Policy holders of the Unit Linked Insurance Products (ULIPs) offered by different insurance companies are assured that these policies are safe and secure”, said IRDA chairman J Hari Narayan in a release that followed market regulator Sebi banning such schemes of select companies last night.
He further said that IRDA will take up the matter “expeditiously in the appropriate forum in accordance with the law.”
Securities and Exchange Board of India (SEBI) in an order issued on Friday evening banned 14 life insurance companies, including those belonging to Tatas, SBI, ICICI, HDFC and Reliance Anil Ambani group from raising funds through unit linked schemes
A consumer is paying his hard earned money as premium to cover the risk of his life and his payment is subjected to market risk by the insurance companies. I think IRDA should have the answer to this question, Does the consumer practically feel relieved of one risk (life risk) by hiring another risk (Maturity amount), as expected by the policy makers? Isn’t it the right time to to ask the investors and admit that ULIP are not insurance products?
excellent decision as lot of miss selling by these companies. the index has grown 4 times since 2004 and the returns given to the clients are in % below 100%