A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens therisk taking ability. It is estimated that over the next ten years Indiawould require investments of the order of one trillion US dollar.The Insurance sector, to some extent, can enable investments ininfrastructure development to sustain economic growth of thecountry.
, insurance-cum-investment, are life insurance plans whosereturns are linked to the stock markets. ULIP returns fluctuate withthe ups and downs in the stock market. Mutual Fund are collectiveinvestment vehicles that pool resources of various investors andinvests these resources in a diversified portfolio comprising of stocks, bonds or money market instruments. Although both these products are somewhat different in their working but more or lessthe fund pooled in both of them are invested similarly. With theadvent of Unit Linked Insurance Plans, the life insurance productshave changed from being only a life cover product to aninvestment vehicle with built-in features of life insurance and tax benefits. These days’ innovative products are flooding the marketwhich offers the features of a traditional insurance policy withadded benefits of high return from the market instruments.
new concept catching up fast in India. One of the more recent examples of financial diversification is‘Bancassurance’, the term given to the distribution of insurance products through branches & other distribution channels of the