Economic recovery helps renew interest in ULIP products

With signs of recovery in the global economy, the insurance sector has seen a renewed interest in insurance products, with investors once again betting on Unit Linked Insurance Plans (ULIP).     

The economic meltdown and uncertainty over the length of this downturn had impacted ULIP products, Deepak Sood, CEO, Future Generali India Life Insurance Company, said while announcing a new ULIP product, Future Freedom Plus.     

During the peak recession, "traditional products got greater attention", he said owing to their assured and safe returns.     
"Investors had turned cautious" and this was reflected in an uptake in the traditional products.     

However, with signs of recovery, the insurance sector is again turning "bullish on ULIP products", he said, adding that insurance players hope to see the scenario revert to the pre-recession period when ULIPs were favoured products.     

ULIPs forced investors to be disciplined in terms of investment and to look at a beyond 10-period horizon, he said.     

"The interest in ULIP products are back", he said, adding the company felt that the time was now right for launching such a product.     

Keeping in mind the recession experience, anxiety and apprehension of investors, Future Generali has factored in a flexibility option of reduction in premium payment in the second year, to ease fears of an investor unable to keep up to high premium rates.

Future Genrali India Life Insurace Company, a Joint Venture between Future Group of India and Generali Group of Italy, is betting high on recovery targetting a five fold growth in revenue, from Rs 150 crore last fiscal to Rs 750 crore by the end of this fiscal. The company is on track and achieved around Rs 153 crore as of September 30, he said.     

"The five times growth is expected from our new product, distribution, expansion, scaling up advisors from 36,000 to 50,000, services", he said.     

From the new product, the company expects to cross Rs 100 crore revenue this fiscal, he said.     

On salient features of the product, he said it offers three fund options, including a new future dynamic growth fund offer with start up NAV of Rs 10. There are two plan options - gold plan option with annual premium of Rs one lakh and platinum option with premium of Rs one lakh and above. Minimum premium is Rs 25,000.     

It provides life cover till the policy matures for 10 to 20 year terms, with limited and regular premium paying options.It provides a uniform cover throughout the term of policy.The sum assured is available and in the event of demise of the policy holder, nominee receives the sum assured over and above the future dynamic growth fund value.     

The highlight of the product is in the second year, the policyholder can pay as low as 75 per cent of the year premium without any reduction in the initial sum assured.