Title: A risk and return analysis of selected unit linked insurance plans of selected public and private sector insurance companies

Authors: Anand Bansal; Amarjeet Kaur

Addresses: Department of Commerce, GKC-Punjabi University Guru Kashi Campus, Talwandi Sabo, Bathinda 151302, India ' Punjabi University Campus, Maur, Bathinda 151509, India

Abstract: One innovation, which stormed Indian life insurance market, was the introduction of the unit linked insurance plans (ULIPs). ULIPs impart the advantage of killing two birds with one stone as it contains insurance component which provides financial security to the family in case of death of the policy holder and its investment component delivers returns along with flexibility and transparency of the investment. In this paper, an attempt has been made to compare the performance of ULIPs of Indian life insurance companies after consideration of two major factors, i.e., risk and return. Statistical measures such as internal rate of return (XIRR) for irregular cash flows, beta, R-square have been used to evaluate the performance of ULIPs from different aspects. Return of ULIPs has been calculated by including and excluding charges as these charges affect the return of ULIPs substantially. The study is analytical and descriptive in nature.

Keywords: unit linked insurance plans; ULIPs; ULIP returns; risk assessment; XIRR; internal rate of return; beta; R-square; charges; life insurance premium; linked FYP; return analysis; public insurance; private insurance; India; performance evaluation.

DOI: 10.1504/IJEBR.2016.074432

International Journal of Economics and Business Research, 2016 Vol.11 No.1, pp.83 - 99

Received: 24 Jul 2015
Accepted: 06 Oct 2015
Published online: 29 Jan 2016 *

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