The Hindu Business Line : LIC invests Rs 7,000 cr in equity under ULIPs

Advertisement

Mumbai Feb.17 Unit Linked Insurance Plans (ULIPs) appear to be the flavour of the year for the Life Insurance Corporation of India. The corporation has so far invested over Rs 7,000 crore in the equity market under these investment-oriented products this fiscal, said an official.

LIC's total investment in equities including traditional products stands at over Rs 13,000 crore.

This fiscal, ULIPs have formed the bulk of the corporation's product portfolio. They have contributed 72 per cent of the corporation's individual business portfolio, compared to just 50 per cent last year.

In the first 10 months of the financial year, ULIPs have brought in Rs 17,000 crore of the company's total individual business of Rs 23,584 crore. They had raked in Rs 5,600 crore of a total of Rs 10,618 crore, during the same period, last year. The rest was contributed by traditional policies such as money back, endowment plans and other pure risk covers.

"Most customers want to ride the equity wave and cash in on the boom. Around 80 per cent of the ULIP policy holders have invested in the `growth fund', which is a high-risk, primarily equity-oriented fund," said a senior LIC official.

"Despite knowing that the investment risk is borne entirely by them, customers still opt for ULIPs because they seek attractive returns as well as the liquidity, although these plans do have a three-year lock-in period," said the official.

Single premium policies

Single premium policies also seem to have found favour, with Rs 17,363 crore coming from these plans — a leap of 190 per cent from Rs 5,976 crore last fiscal. Most single premium policies are ULIPs.

LIC officials, however, maintain that their focus remains on traditional products as renewal premium lays the foundation for a viable business in the long term. The corporation's total new business premium in the first 10 months of the fiscal has grown at 124 per cent to Rs 30,760.86 crore.

More Stories on : Stock Markets | Investments | Life Insurance

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

Stories in this Section
`Outsourcing services moving beyond back office'

New airports: Ministry for priority to players with land

Need long-term research incentives for pharma sector

LIC invests Rs 7,000 cr in equity under ULIPs

Loans against securities: Investors face piquant situation

SEBI expert panel soon to study derivatives segment