All these opinions are from my personal experience and individual research.
I have been subscribed to ULIP policy sold by the ICICI sales guy. He showed some promising returns with some charts as I originally visited the branch to open a tax saving fixed deposit they diverted me to buy a ULIP policy(i am a financially illetrate) and I was converted to a victim successfully. After lot of research this is my opinion about ULIP policies
1) ULIPs have hell of charges like Mortality charges, Fund allocation Charges, Documentation charges, Fund Maintenance charges etc. The sales guy will never explain all these charges to you. These charges will eat up 20% of the principal amount invested in the first premium itself. These charges will be continues with the declining percentile every year up to 5 years
In addition to that they will invest your money in the equity market based on your risk profile so again you have additional risk of losing the money if the market is not good.
2)Have a very long lock in period 5 years mandatory as of now. So upto 80% of your first installment will be utilized for these charges. I paid 70000 INR as my first premium so the total charges for 5 years will be approximately equal to 60 to 65K for 5 years. Starting from year 6 no charges and fund loyalty award upto 0.2% is added to your portfolio which is the only goodie you will receive.
3)The coverage is very low the sum assured is very less 10 times your premium amount.
4) ICICI pru life customer care is pathetic they dont have technical knowledge of the product. Last time I spoke with the women I educated her about NAV’s, Instruments to invest.
5)Buy a well performing diversified mutual funds and invest the money there no hidden charge no lock in period in non tax saving funds and high returns. where as in ULIP After 5 years deducting all the charges you will get the money more or less equal to a fixed deposit returns.
6) Buy a term insurance for 1 crore paying less then 10000 INR per year if you are less than 30 or simply buy some money back insurance policy.
7) Last thing to remember you are given an option to withdraw the policy with 10 to 15 working days(I dont remember) this thing will not be disclosed and transparent by the sales guy it will be mentioned only in the policy document which you will receive after 10 days( which I think Cheap trick to suck the investors money).so utilize this and get your money back. I got it within 5 working days after visiting the insurance office.
though I invested 70kINR I got the refund for 68.5 K INR they told the latest NAV charges have been deducted along with stamp duty. But there is a NAV increase to 1.5 K at the time of surrender. I consider this is some utter lies.