Ulip vs Mutual Funds

I am not writing one more word on should you buy a UL or a MF product. Enough has been written in the world about this, right.

I was just trying to see how both the regulators are looking at the products.

1. ULIP sellers can make a policy illustration: It is mandatory that the person selling a UL plan MUST make a policy illustration – how the fund will look 30 years later.

The Mutual fund industry thinks it should NOT make projections in order to sell the product. So mutual fund agents will give you vague answers.

Of course the MF industry’s approach is correct. When a policy illustration is made, it is ACTUALLY a cost illustration, NOT a projection – but who has the time to explain all this?

2. Amitabh Bachhan, Sachin Tendulkar, Rahul Dravid can all sell life insurance – and fairly obviously ULIP but the SEBI says celebrity selling of mutual funds is not allowed. Period. No great reason, but not allowed.

3. The ulip commissions are still in double digits, and has recently become a value based trail – just like the mutual fund industries. However it is far, far more profitable to sell life insurance vis-a-vis  mutual funds.

The regulators frankly do not care how the sales happens…

there could be more…will do as and when…