ULIPs were very popular until the financial crisis of 2008. They were aggressively sold by insurance agents riding the bull market wave from 2004 to 2007. Even though the expenses of ULIPs were astronomically high during that period, investors did not mind because the handsome returns from equity market masked the high costs when investors looked at their fund values during those bull market years.
Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedgeagainst the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount of money to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraisingand controlling risk, has evolved as a discrete field of study and practice.