Unit-linked insurance plans (Ulips) are long-term savings products with life insurance. However, judging from the perception that people have about the product, it is seen as the evil empire. As the chief executive officer of a life insurance company, I can defend the product, but for now I will step back and look at the evolution of life insurance products as a whole over the past three decades. I will look at the emergence of Ulips, and then evaluate the question: are Ulips bad products?
Before the life insurance industry was privatised (i.e., prior to 2000), I was an insurance customer. I purchased my first life insurance policy in 1987 based on a recommendation from my head of salary section who had said that I needed to invest the amount so that I am not taxed. It seemed a sensible enough suggestion, and I made the purchase. I serviced it well, and even got regular returns. Life was fairly simple. We needed to save tax, and life insurance premium had a stand-alone sectional limit that would save us tax only if we bought a policy.
