In the past, ULIPs were misplaced as short term insurance products in the market. However, they are long term investment products. 4G ULIPs are profitable if the horizon of your investment is at least 5 years or more.
If an investor opts for a monthly option in 4G ULIPs then they get the benefit of rupee cost averaging out which yields good returns in the future.
Here is the transcription of a video in which Anuj Mathur, MD and CEO, Canara HSBC Oriental Bank of Commerce Life Insurance explains how investing in 4G ULIPs for longer duration can help yield good returns.
Vivek Law – From the returns perspective, what has been your experience; have you been able to beat benchmarks consistently. If you were to compare with a mutual fund or the set of mutual funds, we do have rankings now which are also coming from independent agencies on the basis of beating the benchmark of returns. Now, that we have a long time period to judge do you think that the returns have been decent, significant and outperforming benchmark.
Anuj Mathur – Yes, that’s true. First of all, we should try and understand that insurance is a long term product and one should not put money if their horizon is 3 months or 6 months. If the horizon is five years or onwards then we have consistently outperformed the benchmark across all of the funds, there is a decent amount of outperformance.
In equity, we have seen that if you stay invested for long term clearly there are benefits. Particularly, when you are going for Invest 4G or online ULIPs and if you opt for a monthly option, you can get the benefit of rupees cost averaging, so every month your premium is getting invested at different market levels. We have done analysis and over a period of ten to twelve years equity gives much better returns compared to any asset class. We have our fund performance of the last ten years and we have outperformed across all time frames in all our funds.
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