Review of your ULIPs that you bought
When equity markets were surging northwards, apart from equities and mutual funds, ULIPs (unit linked insurance plans) were also favourites with investors. For investors, it was another opportunity to ride the rising markets; while for the insurance advisors, ULIPs offered the opportunity to garner attractive commissions. It was a win-win situation for all, until markets changed directions.
Now with the markets falling, investors are seeing the value of their ULIP investments decline with each passing day. The higher expenses charged in the initial years are only adding to the agony. Both investors and insurance advisors are responsible for this scenario. Investors, for having made ill-informed investment decisions and advisors for having mis-sold ULIPs and/or failing to adequately educate investors.
The trouble is that there is no universal answer to this question. Investors who are invested for the long haul (10-15 years or thereabouts) in a well-managed ULIP with the intention of achieving a predetermined investment objective should continue to stay invested.
However, investors who got invested for the wrong reasons or in the wrong ULIP may have to consider making an exit after consulting with their advisors. Such investors would do well to explore all available options and also study the implications of making a premature exit, before making a decision.
