As the IRDA & SEBI tussle over ULIPs gets into a prolonged battle- it seems to have started claiming its first victims.
In a bid to make Life Insurance sales come closer to the transparency levels in Mutual Funds, IRDA has mandated all Life Insurers to clearly spell out the commission structure on their policies.

This means that any customer would henceforth know how much of his/her first year premium is being pocketed by the sales guy. This could give a lot of bargaining power in the hands of the consumers. As it is, the market is known to have numerous instances of agents passing back a part of their commission to customers to close sales. With this - one can only expect such dubious sales processes to increase.

Not surprisingly, most insurers are unhappy with the move & they feel that such disclosures on margin structures are not really required.

IRDA, the insurance regulating authority has just approved the ULPs- Universal Life Policies for Bharti Axa Life Insurance and Max New York Life.

Its an interesting development in our opinion because of the inherent nature of ULPs.

Here are few of the salient features

1.Customers have flexibility in premium, sum assured as well as the tenure of the product.

2.Freedom to vary the payment of the premium over the policy’s life- you can start with monthly payments, switch to annual then quarterly and so on. What does not change is the premium quantum.

3. Also the policy is not automatically cancelled even if the customer fails to pay the premium. Even if the lapsed payment is not made , the ULP will be kept in force- what does change is the sum assured at the time of payout.

ULIPs have been seeing a decline in their share of new policies issued, for the last two years. This is due to a gradual & steady increase in the volumes of traditional insurance products like - term plans, endownment policies, money back plans & retirement plans.

With new & rigourous IRDA guidelines on ULIPs, agents have also started re-focusing on the traditional plans as the incentives are not capped here.
For the insurance companies also, a higher share of traditional plans gives a healthier portfolio and a higher valuation.

In the past the buoyant economy & stock markets provided insurance companies an easy tool to ride the wave- in the form of ULIPs. But lately they have realised that long term predictability of premium inflow is a critical aspect of valuation.

Birla Sun Life Insurance (BSLI) is one of the leading Life Insurance companies of India.
It has an impressive product portfolio.You can read about a few of the prominent policies here:

Term plans from Birla Sun Life

Insurance Dream Plan

MoneyBack Plan

Premium back term plan

Find attached a comparison of ULIPs plans from BimaDeals.
If for some reason, you cannot see this image- please view the attached file

BimaDeals has now come up with a Comparison Chart in ULIP Products which will help you to check out the Eligibility differences, Premium Allocation Charges & other Features across Life Insurance Players.

strong>

Tata-Aig Life Insurance Company has launched a Unit linked plan called Invest assure Insta Unit –Linked plan. The plan offers a guaranteed maturity bonus to its customers & is made to help them with high allocation rates so that they can get maximum from their investments. It provides an option to choose from five funds depending upon the risk customer wants to incur.

Eligibility
The minimum entry & maximum entry age is 30 days & 60 years respectively with the maximum maturity age is 75 years.
TThe policy offers annualized premium options of Rs 20,000, Rs 30,000, Rs 40,000 and Rs 50,000

Features
Higher premium allocation
5% guaranteed maturity bonus

Max New York Life Insurance and AC Neilson conducted a study to capture consumer sentiment during the current financial meltdown to show that only around 11% of the respondents will definitely invest in unit-linked insurance policies (Ulips) henceforth, while about 18% said they will probably invest in Ulips.Interestingly, only 53% consumers maintained the same confidence levels in private financial companies as before. A majority of the consumers, who were interviewed, felt that life insurance and traditional investment options were safer.

The Life Insurance Council , an industry association , has taken up the issue of introducing standard nomenclature for all charges across life insurance companies.

This means that when you now go and wanna apply for Unit Linked plans, you will know how much charges are gonna go towards fees etc.

The industry regulator has been pushing towards this for last one year.In last one year the growth of the ULIPs across insurance companies has been huge.For most Insurance companies ULIPs has been the growth driver.

ICICI Prudential's LifeTime Super is a regular-premium unit-linked policy which offers higher returns & also provides the protective benefit of an insurance cover.

Eligibility
Minimum age at entry: 0 years
Maximum age at entry: 65 years
Minimum Policy Term: 10 years
Maximum Policy Term: 75 years
Minimum Premium: Rs. 18,000 per annum
Minimum Sum Assured: Annual Premium x Term/2. Subject to a minimum of Rs. 1,00,000

Benefits
Investment funds: You can select among the following funds based on your financial goals and risk profile.
1. Flexi-Growth
2. R.I.C.H.
3. Multiplier
4. Flexi-Balanced
5. Balancer
6. Protector
7. Preserver

ULIPs are not a pure insurance product, but combine the features of both Insurance and Investments. It is this flavor of investments that makes this product volatile and susceptible to market changes.
As a policy holder one can choose between the various ULIP plans that an Insurance company has and these typically vary according to the percentage split between debt & equity or the kind of sectors that the fund manager would typically invest in.

Given that the equity markets have a certain level of inherent uncertainty, it is obvious that many policy holders would want to re-think their fund selections - based on how the market has performed and what the projections look like.

Life Insurance Policies are of various types and a good understanding of their features is a must before you can figure out which product makes most sense for your specific need.

One way of classifying Life Insurance policies is based on how the premium is invested and (sum assured) returned back:

- Term Insurance
Term Insurance is a simple insurance plan that covers the life for a specific "term". Death benefit is paid only if the person dies within this covered period. Since its a no-frills product, it is also the cheapest amongst the Life Insurance Products.

- Unit linked Policy