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Journalism of Courage
Is it safe to buy an insurance policy online?Rakesh Kumar
For online transactions,confidentiality of information is vital. We have advanced technology platforms that help provide security but the user has to be careful about sharing passwords etc. It is safe to purchase a policy online since the customer-related information flows directly to the processing centre of the insurer and chances of data leakage or misuse are nil. Online products are more viable for simple-to- understand and easy-to-buy products.
Now that Sensex is at a 30-month high,is it right to invest in Ulips? P Senthil
We advise customers to look at Ulip products with a long-term horizon irrespective of the current market level. We suggest investors to plan for their long-term needs and start investing accordingly. On maturity,in hindsight,what will matter is for how many years one has contributed to build up the corpus. Current market levels will be far less important. In any case,there are several funds across asset classes available for an active investor who wants to maximise returns and switch more actively.
Is it intelligent to invest in products like universal life policies instead of Ulips? Subhash Sharma
Products are designed to address different customer needs. Ulips focus more on generating higher investment returns and transparency while universal life policies help provide a wide range of flexibility in the plan as a customer may not be comfortable committing defined tenure and amount. Similarly,traditional plans help provide higher death benefits and even growth of investments over a long period. I think clear customer segments will emerge around these products over a period of time.
How will the structure and cost of Ulips change?Pankaj Mishra
The changes introduced in Ulips cover restriction on charges within the first five years of policy by defining caps and sub-caps within initial policy period of five years (though overall charge remains the same at maturity level within the prescribed limit). Besides,Irda has also restricted the surrender charges in each year of the first five years. The changes are beneficial for investors who choose to invest through Ulips as there is standardisation of charge structure,and the exit load,and is beneficial for those who are unable to pay regular premiums. Differentiation between Ulips will go down resulting in broadly even cost and structures. This should attract more customers towards Ulip products.
* The writer is executive VP,Kotak Mahindra Old Mutual Life Insurance
* Send your queries at fepersonalfinance@expressindia.com
