The Hindu Business Line : Slew of innovative ULIPs

Kolkata, Aug. 24 For those hooked to unit-linked insurance products, there may soon be many more variants, courtesy plans that insurers have been working out lately.

Adding increasingly to the clutch of options that are already available will be innovative plans, including those that will alter equity exposure based on time periods and ones that ensure absolutely no participation in equity when pre-determined ceilings are crossed. There will also be smart elements such as embedded investment guidance in products and portfolio management in line with ages of policyholders. Or so indicate insurance circles.

Some of the plans that are being bandied about will be those that are considered right for the relatively risk-averse sections of the investing fraternity, sources point out, adding that there will be a proliferation of products to ensure preservation of capital in the days ahead.

While protection of initial investment will remain a major draw, insurers will continue to cater to individuals who may yet like to benefit from possible upsides in the market even when they are not so willing to take large risks, they mention.

Novel ideas

Some of the more recent product offerings may be seen as an indication of the shape of things to come, say marketing executives working for insurance companies. A few novel ideas have been indeed rolled out lately, including those from players such as Kotak Mahindra, Bajaj Allianz and ICICI Prudential. Kotak, for instance, has recently come up with a concept titled ‘dynamic floor’ fund, which is aimed at delivering long-term capital appreciation coupled with a “meaningful level” of capital protection.

The fund, which can invest in a mix of asset classes, can shift exposure from equities to fixed-income when its value drops below a certain floor. Again, when the market moves up, it can scale up allocation to stocks. Also, the idea is to protect at least 90 per cent of the net investment amount over a 12-month period from the date of investment. The average equity exposure is ranged between 45-50 per cent.

ICICI Pru for its part has announced the launch of a plan that draws strength from changing risk profiles of insured individuals. Billed as LifeStage RP, the product can blend automatic asset allocation and quarterly re-balancing. As the company points out, there is “re-distribution of policyholders’ investments across various asset classes at different age-bands”. The re-balancing is expected to help investors cash in on the latest developments in the market.

Insurers suggest that the new-generation products are all designed in line with the feedback they have received from their clients, not all of whom are aware of the merits of realistic asset allocation. They also concede that the plans in question will have to compete with some of the latest concepts introduced by fund houses.

More Stories on : New Fund Offer | Mutual Funds | Life Insurance

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Slew of innovative ULIPs

ICICI Prudential lines up 2 more funds

Auto and ancillary stocks take a knock

Maharashtra Scooters sees quiet accumulation

Bull domination

CSE demutualisation: stake offer oversubscribed

Forex reserves dip by $2.5 b on FII outflows

FII holdings in ICICI Bank

Fast track route for follow-on equity issue: SEBI

Wockhardt Hospitals plans to raise Rs 1,000 cr