Insurance, mutual fund returns aren't comparable, here's why

Given the complexity in the cost structure of insurance schemes, it is almost impossible to make an apple-to-apple comparison

In recent times, many insurance fund managers and industry experts have started comparing returns of mutual funds and insurance schemes. The pitch has been that insurance schemes, especially online unit-linked insurance schemes (Ulips) have given better returns than mutual funds. Says Yashish Dahiya, co-founder and CEO of PolicyBazaar.com: “Over the long term, around 85 per cent of the charges in a financial product comprises of fund management charge. Whereas mutual funds charge an annual expense ratio of 2.25-2.5 per cent, the online Ulips only charge 1.35 per cent. A difference of one percentage point creates a huge difference over the