When Are ULIPs The Right Choice

In the previous column, we reviewed a case where a ULIP might have been a more appropriate product given the temperament of the investor.

- ASHOK KUMAR

In the previous column, we reviewed a case where a ULIP might have been a more appropriate product given the temperament of the investor. Compulsive spenders are another category who could benefit from investing in a ULIP rather than a more liquid product that they can easily redeem and squander the proceeds.

A more recent case I remember is that of a young couple, both well employed in the IT sector and earning handsomely, but somehow perpetually facing a liquidity crunch whenever a payment commitment became due. This forced them to keep redeeming their mutual fund investments at frequent intervals, thus robbing their portfolio of the crucial compounding element that boosts returns.