Insurance companies are governed by IRDA and as long as the Indian Insurance companies meet the solvency norms as specified by IRDA, it is safe to invest.
This solvency rule is applicable to nationalized insurance company like LIC as well.
So, be relaxed and just hunt for a better insurance/investment plans.
Wednesday, September 17, 2008
Monday, September 15, 2008
Yearly mode and monthly mode of ULIP premium payment
Which is better?. Yearly Mode or Monthly or Quarterly or BiAnnual?.
Answer is it depends on the situation.
In the current market condition scenario, monthly premium payment option works better. Some ULIPs also offer systematic trasfer plan or automatic transfer plans in which you can allocate your funds in the Debt kind of funds and move it to equity every month little by little and all this happens automatically.
Isn't it wonderful tool.
Answer is it depends on the situation.
In the current market condition scenario, monthly premium payment option works better. Some ULIPs also offer systematic trasfer plan or automatic transfer plans in which you can allocate your funds in the Debt kind of funds and move it to equity every month little by little and all this happens automatically.
Isn't it wonderful tool.
Friday, September 12, 2008
Investing in the name of Kids. Child plans and the myth
How much everyone loves their child need not be shown by buying a child plan or kids plan that are being advertised. If you want to invest in your child's name, do some shopping around. There are many options available.
Kids plans are good for people who can't find time to manage their portfolio.
If you plan well or if you have a advisor then it's best to go for other plans for your kid.
Kids plans are good for people who can't find time to manage their portfolio.
If you plan well or if you have a advisor then it's best to go for other plans for your kid.
Thursday, June 7, 2007
ULIP as replacement for Term insurance???
If you want a term insurance, go for ULIP!!..
Well, many investment and insurance specialists say that don't mix insurance with investment..
With the following comparison you will trash the above statement!! Can't believe right?.
I compared two plans
1. LICs Amol Jeevan -- which offers one of the cheapest term insurance plans
2. Bajaj Allianz's Capital Unit Gain -- which is a ULIP
Sum Assured : 10 Lakhs
Term : 15 years (considering the home loan period that most people opt for).
Age : 30 yrs
Annual Investment in ULIP : 10000 (you will have to invest 10000 for 3 years)
Product premium/yr total amont amount you get
paid for 15 yrs at the end of term
------------- ---------------- -------------------- ---------------------------
Amol Jeevan 2,812.00 42180 Nil
CUG 1290 to 3600 30000 Fund value(aprox 1 Lakh)
Considering about 10% annual returns in ULIP, at the end of 15 years, your fund value will be somewhere around 1 Lakh!!!. (roughly) Even after deducting all the charges!!!..
So, now you tell me is term insurance is good or ULIP!!
Premium in Term insurance is fixed, but it varies in ULIP that's why you see the range of Rs. 1290 to 3600.
Well, many investment and insurance specialists say that don't mix insurance with investment..
With the following comparison you will trash the above statement!! Can't believe right?.
I compared two plans
1. LICs Amol Jeevan -- which offers one of the cheapest term insurance plans
2. Bajaj Allianz's Capital Unit Gain -- which is a ULIP
Sum Assured : 10 Lakhs
Term : 15 years (considering the home loan period that most people opt for).
Age : 30 yrs
Annual Investment in ULIP : 10000 (you will have to invest 10000 for 3 years)
Product premium/yr total amont amount you get
paid for 15 yrs at the end of term
------------- ---------------- -------------------- ---------------------------
Amol Jeevan 2,812.00 42180 Nil
CUG 1290 to 3600 30000 Fund value(aprox 1 Lakh)
Considering about 10% annual returns in ULIP, at the end of 15 years, your fund value will be somewhere around 1 Lakh!!!. (roughly) Even after deducting all the charges!!!..
So, now you tell me is term insurance is good or ULIP!!
Premium in Term insurance is fixed, but it varies in ULIP that's why you see the range of Rs. 1290 to 3600.
Tuesday, April 17, 2007
ULIP and Mutual Fund Comparison
I recieved couple of emails asking for comparison between ULIP and Mutual Fund.
Here it is..
I will start the comparing in a different way.. my point is "When to choose investing in ULIP??".
In short, ULIP = Insurance + Mutual Fund
1. If you don't need insurance, ULIP is not the best bet
2. If you need insurance and want to invest in mutual fund kind of instruments, ULIP is the BEST bet
3. ULIPs are hybrid products. that means, they have insurance and investment component
4. ULIPs offer insurance at a very cheaper rate than term insurance, as others say, I don't agree to the point that term insurance + mutual fund is better.. I don't agree. you can compare for yourself.
5. In ULIP, you can switch between Equity fund to Debt fund and vice versa without any entry/exit charges but you can't do that in Mutual funds. in MFs, there will be entry/exit charges if you do that
6. You have to invest for atleast 3 years in ULIP, but MFs are not like that
7. ULIPs are eligible for Section 80C tax rebate. MFs are not (except tax saving MFs)
8. ULIPs have lock-in period of 3 years where as MFs are not (except tax saving MFs)
9. Returns on ULIPs are not taxable, but returns on MFs are taxable if you withdraw within 1 year
10. You can invest surplus amount in ULIP with minimal entry load or charge, where as there is nothing like surplus in MFs.. in MFs everything is considered as plain investment with same charge
11. ULIPs may or may not disclose the holding portfolio but mutual funds have to disclose where they are investing
12. ULIPs generally have low expense ratio than MFs
13. ULIPs have additional charges on insurance where as MFs doesn't have any insurance component
14. ULIPs have additional charges called "Allocation charges".
So, choose wisely, invest wisely. Bottom line is,
"If you want some insurance at cheaper price and also want to investment in mutual funds, ULIPs are the best instruments to invest in"
Here it is..
I will start the comparing in a different way.. my point is "When to choose investing in ULIP??".
In short, ULIP = Insurance + Mutual Fund
1. If you don't need insurance, ULIP is not the best bet
2. If you need insurance and want to invest in mutual fund kind of instruments, ULIP is the BEST bet
3. ULIPs are hybrid products. that means, they have insurance and investment component
4. ULIPs offer insurance at a very cheaper rate than term insurance, as others say, I don't agree to the point that term insurance + mutual fund is better.. I don't agree. you can compare for yourself.
5. In ULIP, you can switch between Equity fund to Debt fund and vice versa without any entry/exit charges but you can't do that in Mutual funds. in MFs, there will be entry/exit charges if you do that
6. You have to invest for atleast 3 years in ULIP, but MFs are not like that
7. ULIPs are eligible for Section 80C tax rebate. MFs are not (except tax saving MFs)
8. ULIPs have lock-in period of 3 years where as MFs are not (except tax saving MFs)
9. Returns on ULIPs are not taxable, but returns on MFs are taxable if you withdraw within 1 year
10. You can invest surplus amount in ULIP with minimal entry load or charge, where as there is nothing like surplus in MFs.. in MFs everything is considered as plain investment with same charge
11. ULIPs may or may not disclose the holding portfolio but mutual funds have to disclose where they are investing
12. ULIPs generally have low expense ratio than MFs
13. ULIPs have additional charges on insurance where as MFs doesn't have any insurance component
14. ULIPs have additional charges called "Allocation charges".
So, choose wisely, invest wisely. Bottom line is,
"If you want some insurance at cheaper price and also want to investment in mutual funds, ULIPs are the best instruments to invest in"
Saturday, March 3, 2007
Effect of NAV on Switching between funds!! What is cut off time?
You can switch between different funds in ULIP.
But what is the cut off time for the switch?.
According to irda, cut off time is 4:15 PM. Well here is the example
Scenario : Switching between Debt to Equity Fund
Time : Placing the request at say 2:00 PM. By written request or through cash.
Date: March 03, 2007
NAV of Equity fund dated March 02, 2007 : Rs 30
NAV of Equity fund dated March 03, 2007 : Rs 31
NAV of Equity fund dated March 04, 2007 : Rs 33
o.k shall we do the analysis now.. ?
As you put your request by 2 PM your NAV will be taken as Rs. 31.
As per my observation, NAVs are usually declared at 10:00 PM or so..
IRDA says
10.6.1.1 In respect of premiums/funds switched received up to 4.15
p.m. by the insurer along with a local cheque or a demand draft
payable at par at the place where the premium is received, the
closing NAV of the day on which premium is received shall be
applicable.
10.6.1.2 In respect of premiums/funds switched received after 4.15
p.m. by the insurer along with a local cheque or a demand draft
payable at par at the place where the premium is received, the
closing NAV of the next business day shall be applicable.
10.6.1.3 In respect of premiums received with outstation
cheques/demand drafts at the place where the premium is received,
the closing NAV of the day on which cheques/demand draft is realized
shall be applicable.
But what is the cut off time for the switch?.
According to irda, cut off time is 4:15 PM. Well here is the example
Scenario : Switching between Debt to Equity Fund
Time : Placing the request at say 2:00 PM. By written request or through cash.
Date: March 03, 2007
NAV of Equity fund dated March 02, 2007 : Rs 30
NAV of Equity fund dated March 03, 2007 : Rs 31
NAV of Equity fund dated March 04, 2007 : Rs 33
o.k shall we do the analysis now.. ?
As you put your request by 2 PM your NAV will be taken as Rs. 31.
As per my observation, NAVs are usually declared at 10:00 PM or so..
IRDA says
10.6.1.1 In respect of premiums/funds switched received up to 4.15
p.m. by the insurer along with a local cheque or a demand draft
payable at par at the place where the premium is received, the
closing NAV of the day on which premium is received shall be
applicable.
10.6.1.2 In respect of premiums/funds switched received after 4.15
p.m. by the insurer along with a local cheque or a demand draft
payable at par at the place where the premium is received, the
closing NAV of the next business day shall be applicable.
10.6.1.3 In respect of premiums received with outstation
cheques/demand drafts at the place where the premium is received,
the closing NAV of the day on which cheques/demand draft is realized
shall be applicable.
Kids ulip plan!!.. Is it any good? What's the difference?
Few of my observations on Kids' ULIP Plans
1. Kids plan is no magic. It can't give any better returns than any other plans
2. If you are spend thrift and someone else to manage your money then go for kids plan.. of course for your kid
3. Difference is that the other ULIP plans are flexible on withdrawl. But Kids plan is little rigid on that.
4. Amount you get is based on the age of your kid.. rather I would say milestone of your Kid's life. for example, after 10th std, 12th std and for degree.
5. Sometimes it's good to go for Kids' plan as you may tend to withdraw all your money at once!!!..
Happy investing!
ulipinvestment@gmail.com
1. Kids plan is no magic. It can't give any better returns than any other plans
2. If you are spend thrift and someone else to manage your money then go for kids plan.. of course for your kid
3. Difference is that the other ULIP plans are flexible on withdrawl. But Kids plan is little rigid on that.
4. Amount you get is based on the age of your kid.. rather I would say milestone of your Kid's life. for example, after 10th std, 12th std and for degree.
5. Sometimes it's good to go for Kids' plan as you may tend to withdraw all your money at once!!!..
Happy investing!
ulipinvestment@gmail.com
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