“CHANGING ULIPS

IN 2011”

PRESENTED BY:
SONIKA RAITANI
 OBJECTIVE OF THE STUDY

To analyze the trend of changes in ULIPs and to

study the implications and impact of these
changes in ULIPs to investor and to the entire
industry.
 COMPANY PROFILE

 It is a joint venture among IDBI Bank, Federal Bank and

Ageas Insurance International.
 It was established in March 2008.

 In just five months of inception it became one of the

fastest growing new insurance companies to garner Rs.
100 Cr in premiums.
 In only its first year of operations, as on March 31 st,
2009, the company collected more than 328 Cr in
premiums- highest first year collection in the history of
Indian life insurance industry, through over 87000
policies and over Rs 2825 Cr in sum assured.
 WHAT ARE ULIPS?

 ULIP stands for Unit Linked Insurance plans, came into

play in 1960s.
 It is a financial product that offers life insurance as well
as an investment like a mutual fund.
 Part of the premium policyholder pay goes towards the
sum assured and the balance will be invested in
whichever investments he/she desire- equity, fixed-return
or a mixture of both.
 Basic charges on ULIPs: Premium Allocation Charges,
Mortality Charges, Fund Management Fees,
Policy/Administration Charges, Surrender Value, Fund
switching Charges, Service Tax Deduction.
 MAJOR CHANGES IN ULIPS

 27 July, 2009: ULIP charges restricted to 3% by IRDA.

 24 June, 2010: Tussle between the two regulators, the
ULIP Game-IRDA 1, SEBI 0
 29 June, 2010: Increased lock-in-period & cut agent’s
commission
 6 Aug, 2010: Guaranteed returns on ULIP pension plan
until March 11, 2011.
 RESEARCH METHODOLOGY

 PRIMARY DATA:
Observation Method
Interview Method

 SECONDARY DATA:
Magazines
Newspaper
Internet
 DATA ANALYSIS AND
INTERPRETATION

 Impact of changes on insurers

 Impact of changes on agents

 Impact of changes on investors

FINDINGS AND SOLUTION PROPOSED

 Very less commission for agents

 Now Mutual Fund and ULIP both will provide almost
same kind of commissions
 Reduction in mis-selling

 Friendly move by IRDA to achieve the goals of “Making

each Indian an informed investor”
 Still there is scope of changes in ULIP
 CONCLUSION

 Changes made by IRDA are the step in the direction of

making ULIPs a more transparent product with larger
benefits to the investor community.
 All of the changes work to the advantage of the investor.

 Small regular premium policies will become unviable.

 Commission structure can’t sustain an agent’s income.

 All changes have put a question mark on the certain

issues. Will there be two version of ULIP-
CONTINUED…
pre September 2010 and post September 2010,with
different features or different tax treatments?...or
will there be one more version-post April 2010?...

And the confusion continues….

THANK YOU