Once again the trend in the insurance sector has moved back to ULIP's after a long lull. Many people who have not revived their polices has started reviving their policies after the upbeat in the stock market. But why is it that there has been so many lapsations during the market downtrend? where as it was the right opportunity to invest in the stocks to gain maximum.
As per my view 75% of the lapsations happen because the agent is not well trained and equipped to make his client understand the implications of investing in ULIP's.
Secondly, it has become a trend to sell insurance as a short term investment product to make maximum gains, whereas insurance is a long term investment product.
ULIP's are to be sold to those people who know about the stock markets or the clients are to be educated about the investment and the returns by investing in ULIP's.
One thing for sure ULIP's are good investment tool to clients if only their goal is long term, but it is never advised to buy ULIP's for short term gains.