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 INTRODUCTION TO
FINANCIAL PRODUCTS
j Financial Products refer to those instruments
that help you save, invest and get insurance.

j Types of financial products

1. Shares
2. Bonds
3. Mutual Funds
4. Unit Linked Insurance Plans
5. Annuity
6. Treasury Bills
 UNIT LINKED INSURANCE PLAN
(ULIP)

_ A ULIP is a market-linked insurance plan.

_ ULIPs offer a transparent option for customers to

plan their various life stage needs through
market-led investments as compared to
traditional investment plans.

_ ULIPs serve the purpose of providing life

insurance combined with savings at market-
linked returns
 ULIP
_ It comes in three varients

£ Aggressive ULIPs (which invest 80%-100% in

equities, balance in debt)
Balanced ULIPs (invest around 40%-60% in
equities)
Conservative ULIPs (invest upto 20% in equities)
 PROS OF ULIP
_ Flexibility ² you can choose your term, insurance
cover, pay premiums for a limited period

_ Transparency ² you know what is the amount

you are paying for the various benefits.

_ Tax free returns ² 100% tax free since they are

received from insurance and it is a contract.

_ Switch between various options.

_ Tax benefits when investing under Sec 80C.

 CONS OF ULIP
_ Flexibility ² this can act a disadvantage since the
person may use the withdrawal and may not end up
building a huge corpus

_ Initially heavy costs ² You pay around 15-20% for the

first year and then around 5%for the next two years

_ No control on costs.

_ One may try to time the market and may make

errors.
 K Y ULIP
_ If the requirement is for children education then
ULIP with a premium waiver benefit can be
considered because in this case even in case of
death the child ill receive the desired amount at
the age he/she requires which will solve the
purpose.

_ For long time investment ULIP is very good

financial product to invest.
 K Y ULIP
_ ULIPs serve the purpose of providing life
insurance combined with savings at market-
linked returns. (Two-in-one).

_ A ULIP policyholder has the option to invest in a

variety of funds, depending on his risk profile. If
one does not have the appetite to invest in equity,
they can choose a debt or balanced fund.