Understand Ulip Insurance

UNIT LINKED INSURANCE PRODUCTS

Form Last Five Years all Insurance Companies are in the Market with their ULIP Products. After imposition of Minimum Lock in Period by IRDA , all companies launched new (ULIP) products

Unit Linked Products are. Flexible. Transparent. Easy to understand. Provide Better Returns Having More

We will have a Study of Endowment type plans of these companies.

UNIT LINKED INSURANCE PRODUCTS are describe by there Agent as that You can withdraws Your Money after 3 or 5 Year & You will found Returns @ 15-40% Year Growth. You will Get the Insurance (free) with ULIP

Weather he/She is Right or

Misleading

???

Yes he/She is Totally Right But Totally Misleading

Both

UNIT LINKED INSURANCE PRODUCTS are describe by there Agent as that You can withdraws Your Money after 3 or 5 Year & You will found Returns @ 15-40% Year Growth. You will Get the Insurance (free) with ULIP

Yes He/She is Right You can Withdraw the Money after the 3 or 5 Year, But You will be not have any benefit even You will be in the Great Loss* * Explanation given further (Plz refer Excel Sheet)

UNIT LINKED INSURANCE PRODUCTS are describe by there Agent as that You can withdraws Your Money after 3 or 5 Year & You will found Returns @ 15-40% Year Growth. You will Get the Insurance (free) with ULIP

As Shown above the Growth of 15 to 40% may be the Right but this is the Growth of NVA (Net Assets Value), But not of Yours Fund (Because of Diff. Charges) Yours Fund growth will be 8 to 25% only

UNIT LINKED INSURANCE PRODUCTS are describe by there Agent as that You can withdraws Your Money after 3 or 5 Year & You will found Returns @ 15-40% Year Growth. You will Get the Insurance (free) with ULIP

Yes You will get the Insurance with that, but not free. You are Paying for that. Amount for this Insurance cover will increase, as yours age grow up

Lets Understand the Diff. Changes of ULIP as per IRDO

* Most parts of Yours Fund/Saving goes for that (Plz refer Excel Sheet) Specially in Starting Years

Summary of Premium Allocation Charges ULIP Premium Allocation 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year 8th Year 9th Year 10th Year Charges ICICI Life time Plus

25.00

25.00

3.00

3.00

1.00

1.00

1.00

1.00

1.00

1.00

HDFE Endowment

30.00

30.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

HDFC Endowment Plus

60.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

Bajaj Unit Gain

71.50

7.00

6.00

4.00

3.00

3.00

3.00

3.00

3.00

3.00

Bajaj Family Gain

70.00

3.00

3.00

3.00

3.00

3.00

3.00

3.00

3.00

3.00

SBI Unit Plus II

25.00

7.50

7.50

5.00

2.00

2.00

2.00

2.00

2.00

2.00

Max Newyork Life

25.00

20.00

7.50

1.00

1.00

1.00

1.00

1.00

1.00

1.00

Met Life

6.50

6.50

6.50

6.50

6.50

6.50

6.50

6.50

6.50

6.50

Groth of Yours Money with Diff. Insurance Comp. Money Invested Yearly

20000

Groth (%) Assumption

10

Actual Money Invested in 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year 8th Year 9th Year 10th Year First Year

ICICI Life time Plus

3ed

15000

27375

48609

71266

97409

125878

156881

190644

227411

267450

314195

HDFE Endowment

4th

14000

24780

46785

70749

96846

125265

156214

189917

226620

266589

313248

HDFC Endowment Plus

1st

8000

28512

50850

75175

101666

130514

161930

196142

233398

273971

321368

Bajaj Unit Gain

7th

5700

24431

44062

65729

89533

114932

142032

170948

201802

234723

278195

Bajaj Family Gain

6th

6000

25802

46931

69475

93530

119196

146583

175804

206982

240250

284275

SBI Unit Plus II

5th

15000

33763

52853

74232

99622

126992

156498

188305

222592

259554

305510

Max Newyork Life

2ed

15000

29200

48211

72302

98537

127106

158219

192100

228997

269178

316096

Worst

18700

37933

57714

78059

98984

120505

142639

165404

188818

212900

254189

Met Life

Calculation is Based on assumption of 10% Growth in NAV & 20000 INR Investment Yearly. But without taking the Consideration of any other Charges

Groth of Yours Money with Diff. Insurance Comp. Money Invested Yearly

20000

Groth (%) Assumption

10

Period of Loss

Actual Money Invested in 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year 8th Year 9th Year 10th Year First Year

ICICI Life time Plus

3ed

15000

27375

48609

71266

97409

125878

156881

190644

227411

267450

314195

HDFE Endowment

4th

14000

24780

46785

70749

96846

125265

156214

189917

226620

266589

313248

HDFC Endowment Plus

1st

8000

28512

50850

75175

101666

130514

161930

196142

233398

273971

321368

Bajaj Unit Gain

7th

5700

24431

44062

65729

89533

114932

142032

170948

201802

234723

278195

Bajaj Family Gain

6th

6000

25802

46931

69475

93530

119196

146583

175804

206982

240250

284275

SBI Unit Plus II

5th

15000

33763

52853

74232

99622

126992

156498

188305

222592

259554

305510

Max Newyork Life

2ed

15000

29200

48211

72302

98537

127106

158219

192100

228997

269178

316096

Worst

18700

37933

57714

78059

98984

120505

142639

165404

188818

212900

254189

Met Life

From this Illustration it is Quite Clear that Investment for Short Term (SAY 3, 5 or 7 Year) is not Profitable. It is Wise to take a ULIP Plan for Minimum 10 Year or above Period not for Short Term. (Surrender Charge, Slide No. 17 & Next Sheet )

Surrender Value Charges of Diff. Insurance Comp. % Amount of Yours Fund will be Deducted

1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year 8th Year 9th Year 10th Year 11th Year

ICICI

8

SBI Unit Plus II

Nill

4

It is equal to 60 % of the difference between the regular premiums expected & received in the first year of the contract.

HDFE Bajaj Unit Gain

6

For First three Year Poilcy is Block, Surrender of Policy is not Allowed (Money will be Lapes)

6

4

2

1

1

1

Nill 1

1

Max Newyork Life

No Information

Met Life

No Information

1

1

Nill

Now I think You must have Understand Why ULIP Should not taken for a short term investment

The Final Verdict Allocation Charges are very high in regular unit linked policies of all private insurance companies.

Keep Separate Yours Insurance & Investment

Safe

Let, we take a Example of Rakesh working with Top One MNC, Working as an Sr. Engineer Age : 28 Year Marital Status: Married (Having two Kid also) Annual Gross Income : 4.5 Lac Need of Insurance Cover: 40 to 80 Lac (10 to 20 Times of Yearly Income) Yearly Premium Need to Bye Min. 40 Lac Cover through Endowment Plant* = 200000 Yearly Is it Possible for him to pay that Much of Premium No Doubt no………. Now Question is How he should get the Insurance Cover Answer is

He Can get the Insurance Cover of 2500000 by Paying 6500 Yearly which is Possible for him to make his family/Depends safe.

Term Insurance are the Pure Insurance in which You will pay to the Insurance Company a small amount of premium for the Big amount of Risk (But You will not Beck Yours Money Like the others ULIP, Endowment, Children, Pension Plans Etc)

Endowment Insurance (ULIP, Endowment, Children, Pension Money Back Plans Etc) In these Plans You will get the Insurance Cover & get back yours Money (Some times Assure soma times depend on Market i.e. ULIP Etc). But if any Company is Giving u the Assure Return that will not be more than 4% to 7% growth of Yours Money. But If Yours Returns are depend on the Market than why not to Invest directly? Why to Let them Eat a Major part of Yours Investment as the Diff Charges.

Decide Yours Priorities, Long Terms as well as Short Terms. Don’t Care for Big Investment, But think about Regular Investment Always Use SIP (Strategic Investment Planning) for Investment. Diversify Yours Risk/ Investment Portfolio. Don’t have blind faith on Broker or Insurance Agent (They Hide Facts) Don’t do the Investment just to Invest or just to Save tax. Don’t think for saving in the end of Financial Year, think from starting. Always take Yours own Decisions.