ULIPs are clear winners

Dear Policy Holders,

I do hope you have been continuously enjoying the benefits bestowed by the ULIPs you hold. I advise you to keep parking your savings in ULIPs you possess, as top-ups, as it would be at minimal cost and deliver all benefits due under a policy besides maintaining your short-term liquidity. The growth/gains will not be taxed even when you withdraw your gains.

For your information, the Renewal Premium under ULIPs for 6 months ended 30 Sept 09 have equaled Rs 25433 crs (up 34%) while the non-linked products have equaled Rs 36996 crs (up 10.2%). It is clear that ULIPs are finding favour with the public and rightly so because in non-linked products you lose a lot of you premium by way of higher commission paid to advisors which is normally 5% for renewal premium under such policies. The ULIP renewal or top-up attracts only 1% commission payable to advisors.

This apart, the companies have a larger share of earnings as their profit and distribute less in case of traditional non-linked policies. In case of ULIPs, they get only the fund management charge which is fixed and is low. In this light, the ULIPs are clear winners and are the exclusive platform for saving on payable taxes on returns/gains/growth.

Krishna Kumar Khandelwal