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.