Many many many have fallen prey to this "scam".
Read here to know more.
What your insurance adviser won’t tell you??
Cheapest Term Insurance Links
Life Insurance scenario
Insurers rattled by new ULIP definition
and Finally an article from Rediff
Summary in brief
Shun ULIP despite the glossy sales template and presentation. (its mad & raw cheating)
Buy Term plan and Put rest in low cost MF or Index fund.
You will save more and your money will grow much more.