Tier II, III towns' investors increasingly preferring ULIPs

MUMBAI: Due to growing confidence in the stock market, people in Tier II and III cities are increasingly investing in unit linked insurance plans (ULIPs) as compared to those in metros and Tier I cities, according to a survey.

"While preference for ULIPs has remained almost the same in the metros and Tier I cities over the past seven months, there has been a marked rise in investments in ULIPs in the smaller cities and towns," Boston Analytics said in its report on 'Indian Consumers' Savings and Investment Behavior' for February 2010.

"There has been a jump in the confidence level of the consumers of Tier II and III cities in the stock market to a significant level and it has resulted in a rise in investment in ULIPs by these consumers," Boston Analytics' Economist, Debopam Chaudhuri, said.

Investments in ULIPs in Tier II and III cities in the country suggest a growing level of financial literacy in the fast-developing Indian economy, the report said.

The report surveyed approximately 10,000 respondents in 15 Indian cities and towns.