The top three triggers for investing in ULIPs included a range of fund options, expert advice by the company, and flexibility of partial withdrawals
NEW DELHI: Two out of every three Indians intend to invest in a unit-linked insurance plan (ULIPs) in the coming year, as per a survey conducted by Bajaj Allianz Life Insurance Co, with about 92% feeling that their affinity for these products rose post the first wave of the covid-19 pandemic as things returned to normal.
The study, conducted among 499 individuals in the age group of 21-50 years, was done in association with NielsenIQ. The key objective of the study was to explore customer perspectives on life goals and investments in life insurance and understand customers’ affinity towards ULIPs.
In terms of top five goals in life, financial security for family was the most important for those surveyed at 41%, while retirement planning and investing was second at 39%.
Life insurance was the most preferred product to plan for long-term goals such as retirement and children's education, as two in every three Indians said that they invest or intend to invest in these products to achieve long-term life goals.
For investment portfolio distribution, of the 499 surveyed, 23% of the allocation was in bank deposits such as savings, fixed deposits, and recurring deposits; followed by 18% allocation in life insurance investment plans; 13% in health, general, and accident insurance plans; and 11% in equities or mutual funds.
When it came to reasons behind investing in market-linked products, good returns got the highest vote share, followed by income tax benefits and fund performance. Notably, insurance coverage on death was the least preferred option for selecting market-linked products.
Specifically, the top three triggers for investing in ULIPs included a range of fund options, expert advice by the company, and flexibility of partial withdrawals.
According to agents surveyed by the insurance company, flexibility and control are the two key areas that act as major barriers to invest in ULIPs.
“The survey indicates high affinity towards ULIPs, across customer profiles of age, income and geography. The key purchase triggers towards ULIP include its potential to deliver higher long-term return, flexibility to switch funds or withdraw and added benefit of life insurance cover. Customers rate life insurance as one of the most preferred investment instruments to achieve their long term life goals," said Chandramohan Mehra, chief marketing officer, Bajaj Allianz Life.
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