If any of you have any questions related to insurance that you would like my views on, please feel free to ask.
79 comments:
Anonymous
said...
Hi,
What are your views on ULIPs as a pure investment plan?There are certain plans by Kotak and ICICI which guarantee your capital provided you complete the term.
Mr. Anshul Gupta, ULIPS are only for those who are seeking "Insurance Cover" along with "Investments". If you are not looking for "insurance" and purely for "investments" then ULIPS are not ideal place to invest.
I would recommend MF's or Post Office Small Saving Schemes for those whoes only objective is Investments.
Depending on your risk taking capabilities, the following is what I would suggest.
Donot want to take any risk: Invest in Public Provident Fund. Currently guarantees 8.0% (backed by government of India).
Willing to take some risk: Invest in a some good balanced MFs using SIP. My personal choice here would be HDFC Prudence, Franklin India Dynamic PE Ratio FoF. HDFC Prudence is the only fund which gave better returns than the Sensex every year for the last 10 years.
Willing to take higher risk: Invest in a some good diversified MFs using SIP. My personal choice would be HDFC Equity, SBI Magnum Contra/Global, Sundaram Select Midcap.
If Capital Protection is your priority: Option 1: Invest 3 Lakhs in Post Office Monthly Income Scheme. Guarantees an interest of Rs.2000 every month. Start an RD of Rs.2000 in Post Office. This would turn out to be equal to 11.0%+ guaranteed return. But the returns are taxable.
Option 2: Invest 3 Lakhs in Post Office Monthly Income Scheme. Guarantees an interest of Rs.2000 every month. Start an SIP of Rs.2000 in a good ELSS. This guarantees capital protection and also higher returns. My personal choice of ELSS are HDFC Taxsaver, SBI Magnum Taxgain, Franklin India Taxshield.
If you plan to invest for long term 5+ years, I think the chances of losing capital are very very minimal even if you invest in diversified equity MFs using SIP.
Thanks for your comments.I totally agree with you that ULIPs are a lousy investment vehicles.But post July certain ULIPs also guarantee you the capital invested by you and also give you a 80% exposure to equity while rest in debt.There fees are higher compare to a diversified MF but then they give you a guarantee of your capital. Minimum term is 10 years.What do u have to say on this?
I was talking about Kotak Safe Investment Plan 2.Please go through the website,you'll find all the details there.I would like to know your views about it as a investment and not as an insurance cover. Thanks, Anshul Gupta
Really enjoyed reading all ur blogs ...must say very very helpful.
I have a question regarding the Pension Plan Vs ULIPs.
If one is planning for a long term investment then seems like the Unit Linked Pension Plans have lot lesser charges as compared to ULIPs. I compared HDFC and ICICI liftime Pension plans with ICICI Lifetime II.
Dear Jasjot, Regarding pension plans, I personally like Unit Linked Pension plan offered by HDFC. The following are the advantages of HDFC.
1) The returns of HDFC funds(equity and balanced) have been very good for the last two years consistently.
2) HDFC has the most competitive charges (Fund Management Charge and Administrative Charge). This will turn out to be a sizable savings especially on the long run.
Disclosure: I myself have a pension plan from HDFC SLIC.
Dear Anshul, I have gone through the details of Kotak Safe Investment Plan 2. The following are the charges associated with it.
Loading Charges: 14% of premium first year, 3.5% from year two onwards. Admin Charges: 7% of premium first year, 4% from year two onwards. Fund Management Charge: 1.5% for growth fund. Mortality Charges: Based on Risk cover.
This ULIP guarantees your Capital(all premiums paid) and at the same time maintains an exposure of 40 - 80% in equities. It will not be able to generate the returns a good diversifed equity MF might generate (because of the charges associated each year). But inspite of this I think it is a decent ULIP to invest in mainly because of the capital guarantee it offers inspite of maintaining a high exposure to equity.
If your objective is maximizing returns, then I would still advise investing in a good diversified equity MF.
If you objective is maximizing returns with "Capital Guarantee", then Kotak Safe Investment Plan 2 is a good option. Please be aware you are also eligible for Tax benefits under Section 80C , 10D. Opt for the lowest "Risk Cover" if you are purely interested in returns (this will ensure you pay minimum mortality charges).
Hi Raj, Thanks for your valuable comments and the pains taken.Capital is guaranteed only if you complete a minimum of 10 yr term and as you rightly said that chances of losing the capital are very less if one is invested for such a long period,i think investment in this ULIP will be a waste.Moreover,any Kotak Mf or ULIP has not posted good returns in comparison to other funds.Hence, i think its better to invest in a well known diversified fund. Thanks, Anshul Gupta
Dear Anshul, Returns wise a diversified MF will always be better than any ULIPs since you don't have to pay all the charges.
Fund performance wise, ULIP funds have been performing well. For instance the last 1 year returns of Kotak and HDFC ULIP funds have been 59.12%, 56.44% respectively. This is comparable to the returns of a good ELSS like HDFC Taxsaver, SBI Magnum Taxgain whoes returns in the past one year have been 56.22%, 54.55% respectively. (I have compared against ELSS since both these investments offer tax benefits under section 80C).
Dear Harmeet, I am a BIG NON BELEIVER OF traditional endowment/cash back plans from LIC for the following reason.
1) Returns wise, I don't think they beat inflation.
2) There is no compounding effect on your investment (The bonus declared is always on the sum assured).
3) They have fixed maturity dates. You don't have the flexibility to withdraw money when you actually need it (The only option is taking a loan on your investments for which they charge additional interest).
4) The policy can lapse if you don't pay your premium within the specified time frame (even if you had been regularly paying your premium for say 10 years)
5) The risk cover is very less compared to the premium paid.(You have some ULIPS that provide risk cover upto 125 to 150 times the premium paid).
I have another question regarding Unit Linked Pension Plan.
The HDFC Pension Plan, allows you to surrender the policy after 3 years without deducting any charges. I want to know what are the tax implications on the amount received after surrendering the policy.
And are there any other hidden charges in doing so?
Dear Jasjot, You will need to pay tax on surrendering pension plan prior to vesting date. Pension plans are suited for those who plan to save for long-term towards their retirement.
The proceeds from regular ULIPs (not pension plans) will not be taxed under Section 10(10D).
Dear Satish, Market Plus by LIC is a Unit Linked Pension Plan. I have just read the offer document. You have a lockin period of 3 years on your investment.
1)Your parents won't be able to surrender the policy for 3 years.
2)The policy does not allow partial withdrawals. Your only option for withdrawal of money is to surrender.
3)Charges wise, it is ok and is comparable to other ULIP pension plans.
Performance wise, I am not a big beleiver of ULIPS from LIC. I would rather buy an ULIP from a private insurance company rather than LIC.
Hi, This may be a peculiar question to you. Consider yourself as an unmarried software programmer aged 24 with an annual income of Rs.3lakhs. You want to Save as well as avoid paying tax. You are not covered with any insurance till now. Will you choose investing in - ULIP's or ELSS?. Please explain in detail the reason for the same.
Dear Sundar, The answer to your question depends on your answer to the below questions.
1) Do you have any liabilities like loans that you need to repay (house loan or any other loans).
2) Do you have any dependents (I know you are not married, but are your parents dependent on you).
If the answer to any of the above questsions is an "Yes" then I would advise you to invest in ULIPS (since you will need insurance cover to repay your liabilities or to provide something to your dependents).
If the answer to both the above questions is a "NO", then I would advise you to invest in ELSS.
Hi, I went through all the views posted in this site but its surprising that no one has mentioned about Metlife's Met Smart - ulip plan. According to my knowledge, it is one of the best plan available in the market if the term we are luking is more than 10 years. The reasons are 1] coverage upto age 100 2] 6 fund options 3] 4 switches/ year are free between funds 4] 2 free partial withdrawals/year 5] charges are one of the least in the industry 6] invests only in nifty - so stable returns. I request your view on the same.
Thank you so much for sharing this investment tips and info. Great !!! I have this doubt. Currently, I am holding a pension plan from LIC(Jeevan Nidhi) and paying 10K per anum. Now I am planing to pledge some more amount in to my insurance pool. Will it be wise to take one more Pension plan (ULP) or invest in some other ULIPs or MFs. Please advice. This is my insurance info Personal Details - 26Years/Men ( S/W Engg). 1) LIC Jeevan Anand - 5Lakhs( 39K per year) 2) LIC Jeevan Nidhi - 10K for 26 Years 3) ICICI LifeTime - 18K per year 4) SBI Term Insurance - 25Lacs 5) SIP with SBI - 5K per month
I missed PPF, and planing to put some amount. But sometimes I feel,I have less amount in Pension Plan. What is your advice? I have an additional 50 to 60K per month for investing. Please suggest the right path.
I want to invest in ULIP and would like to know which ULIP would be a better choice for investment(Bajaj Allianz, HDFC SLIC, ICICI Prudential, Kotak, SBI)
Hi, Which of the following is better for an investment of 50,000/pa for 20 years. - HDFC YoungStar Plus - HDFC YoungStar - Aviva Freedom Life Plan
Can you suggest some other plan for the same please. I am totally confused. First I signed up for YoungStar then Aviva Freedom Life. Then somebody told me about the higher FMC in Aviva. Now I have surrendered the Aviva as well.
Charges wise, HDFC ULIPS are the cheapest. They will work out the best over the long run due to very low fund management charge. Hence my personal choice would be HDFC Young Star Plus.
Hi, I have invested 50000 in ICICI predential ULIP under balancer mode. Can you plz tell me is it good to invest these money in ULIP? and how abt its returns? It will be great helpful for me if you can answer my query and if possbile give me the link whre I can findout its returns.
An MLM company has offered a ULIP from Bajaj Allianz wherein the premium is Rs.12,000 for 3 years and the sum assured is Rs.4 lakhs. They are also claiming to create an 8 lakh return after 20 years.
what's your take on this?
And do you think that the tax benefits are sustainable over time?
Ashish, Sorry for my late reply. Check out the site bajajcapital.com. The keep track of the performance of the different ULIPS under the section "ULIP Monitor". You can check the performance of the fund you invested.
Hi, I already have one insurance plan. Ulips has the flexibility to switch between the plans and also the Insurance cover can be decided by the Investor.
Considering this, Does ULIP work good than mutual funds? My agent always suggest for ULIP. I am little bit confused on reading this. He says that Tax saving mutual fund is always 80,20 and are inflexible. Also tell me how much of my money will be wasted for fund management, if iam planning to invest in ICICI Ulip 30000 premium.
Thanks a lot for your view, its really helpful to for the investors.
Raj i have a question im 23 yrs old im looking for some investments schemes for savings and tax benefit i have only 1 insurance policy jeevan anad with LIC what dou you suggest me ..whereas everyone is suggesting me for HDFC young star linked plan
Hi Arun, Are you looking for insurance cover or pure investments.
If you are only looking for investments/returns then I would suggest investing in Tax Saving Mutual Funds (ELSS).
If your term of investment is short (less than 10 years) then again only invest in ELSS for saving taxes.
If you need insurance and are willing stay invested for long term like 15 years ore more, then you can think of ULIPS. Yes ULIPS have the flexibility to move funds between equity and debt. This is one feature which works on the long term especially say after 10 years if you wish to reduce your risk by reducing exposure to debt.
Regarding ULIP's, my personal choice is HDFC ULIPS. They work out to be the cheapest in terms of charges over the long run.
Thanks for your reply.My prime obj is returns from savings.However i want to save for long term as u never know wat i will be earning in late 5otys where u need money at prime.
Kindly suggest wat should be prime saving for guy at age of 23. is it returns or long term saving ??
Gaurav, This is what I would suggest you. Of the total amount you wish to invest, put 75% of the amount in a equity mutual funds and the balance 25% in a ULIP pension plan.
Mutual funds will help generate returns at an aggresive pace. At the sametime they offer the liquidity if you wish to withdraw money at anytime.
The ULIP Pension plan will lock your money for longterm towards retirement. The pension plan that I have is from HDFC standard life. I would recommend the same for you. (This pension plan has high initial loading charges, but extremely low fund management charge). So on the long run for an investment term of 25+ years, it works out to be the cheapest.
Check out my article on which charges are the most important which will explain why fund management charge is soo important.
Hi Raj, I have invested in ICICI Prulife ULIP maximiser option. I tried to utilise the switch option provided by them. When sensex was at 10k february 2006, I switched to protector option, thinking that market will come down. But it went on making new highs of 12600 in may. I thought of missing the rally and shifted back to maximiser in may. Eventually there was a crash and my net worth has reduced a lot. Since then I left as it is in maximiser. It has recovered since then. As of now, my units worth is less than what it was in feburay 2007.
Since the market is at all time high, would you advise me to switch to protector/balancer or continue with the maximiser option.
very nice thread, i have some very basic query, 1. can some explain the following terminologies clearly
a.ELSS b.ULIP c.SIP
2. I have some amount , about 1 lakh, which i want to invest, i dont want tax exemption, and dont have much responsibilities, where do you suggest i should invest?
Should I invest in Bajaj Allianz's New Family Gain ULIP? I am not interested in insurance. I am interested only in IT benefit and decent rate of interest/growth. Your suggestion.
If you are only interested in tax benefits and not interested in insurance, then ULIP's are not for you. I would strongly advise investing in Tax Saving Mutual Funds (ELSS).
My self Ashish and my age is 26 and i am new in this field.I want to invest my money in MF's for Tax saving and maximum return purpose. Accordig to market condition is it right time to invest in MF's? Please suggest some MF names in which i can invest my money. Should i take SBI Megnum tax saving MF's at this time or some other MF's or schemes?
I really appreciate for your time and dedication Raj. I have a very simple question :- 1) I have two LIC schemes 10K + 10K 2) Have PPF account 3) Now I want to invest for my child future. Please let me know which one should be best.
Hi Raj, I am Nizamuddin software engg.I hv ULIPS from LIC and ICICI Pru.I am planning to invest ULIP in Bajaj Alianz but u always suggest HDFC is best for ULIPS,can u please justify me so that I will also choose from HDFC and also suggest the ULIP name from hdfc.
Hi Raj, I m working wid MNC. I want to invest aound Rs.50000/- annual premium in ULIPS as i do not have any life cover till yet and also i want to have decent returns. So suggest me which ulips shud i invest. waiting 4 ur reply
Hi Raj, I am 24 yrs old unmarried S/W Professional, I am a bit confused over invetments for insurance. It will really help if I get some advice from you.
Currently I have a ULIP from Bajaj Allianz.. 20K/Anum Premium (5 Lakh cover).
Is the above ULIP plan is good accorcing to you? Since I am bit regreting due to low cover of just 5Lakh for 20k premium.
Also I have family dependcies and in future I might go for Home loan above 25Lakhs.
So I think I should have life cover of 45-60 Lakhs. Is there any insurance product available in market which could provide such cover at low premium of 10-12K ? and also I am expecting returns of premuim paid at maturity.
Rest of the investment I am planning to do in ELSS- SBI magnum, HDFC Taxsaver and Reliance/Franklin. Please let me know your opinion on this.
hi raj, i have gone throug most of ur reply they r nice, but a few thinks i wld like to know ......r u working for hdfc standard life in most of ur comment i have seen promotion of ulip through hdfc..... r u aware of the chrges that they deduct or any other private insurance company deduct ........nearly 60% r deducted ....then there r surreneder charges ....i need to know whether the govt insurance company have any surrendr charges....u have also written that u dont beleif in the state run lic b.coz they havent given a decent return is that true,..... how abt bima plus or jeevan plus or future plus .....lic...in the down market when the market crashed they only losse 10 to 12%....where as for private companies it has gone to 19 to 25 % secondly before commenting just go through how much lic invest in equity and how much in money market instuments.....and traditionla planr meant for giving risk cover with a decent return at the end ..thats is more than 8 to 12% percent as per plan and term.....thirdly never compare any pivate company with the asia ,s biggest financial institute ....that is lic......is any company in profit or say surplus even after 8 yrs in the indian inurance market including ur fav,.. hdfc.... thanx
1) Do I work for HDFC Standard Life? NO. I am not an insurance agent and I do not work for any insurance company.
2) Regardings returns, we cannot come to a conclusion based on short time frames.We need to look at consistency of returns over long term to be able understand which ULIP's are performing better. I have used a sample size of 3 years for comparing returns. Kotak and HDFC ULIP's have been the top performing funds over a period of three years.
3) Regarding available funds, risk management. All ULIP's have multiple funds to select from which are a combination of equity and debt. One needs to decide the fund he wants to invest in based on his risk apetite. So I would compare equity funds to equity funds, balanced funded to balanced funds. It will not make sense to compare equity funds against balanced or debt funds.
4) Regardings traditional endowment plans, I have not come across any plans which gave a return of 8 to 12%. Usually the returns are in the range of 4.5 to 6%. If you know of endowment plans that offer 8 to 12% returns, please do share the information with me and I will be more than happy to evaluate and suggest these plans to others.
I want to know whether I should invest in ULIPS. My annual income is 3.5 lacs and looking for tax saving schemes. I am single with no dependents, no liabilities like house loans etc. Could you advise on whether investing in ULIP is a good option. I have investments in MF schemes like Reliance Vision, reliance growth, reliance power diversified, HDFC equity, HDFC balanced, SBI Magnum tax saver, SBI Magnum Global, Reliance Equity Advantage Fund, JM Equity & Derivative Fund etc. I also have an investment in stocks.
So should I invest in Metlife's SmartPlus ULIP or invest in ELSS schemes.
If you would like me to review your current MF portfolio, please do send an email to info@costaverager.com with your current holdings in the different MF schemes.
My annual income is Rs.5,00,000/-, rite now i have am only investing money in Post's Recurring scheme...I want to invest in short-term schemes and want to save tax also... as I am planning to buy a house in near future so dont want to block the money. Could you suggest me some good schemes or MF's. Further, If I want to go for ULIP which is a good insurance cover.
Dear Prasanna, I am currently out of town and will be back this thursday. Please send me an email to info@costaverager.com so I can send you a personalized plan.
I would advise investing in liquid debt funds until you buy your house. Stay away from ulips until you know what your cashflow is like after you buy your home.
The earlier you start planning for your retirement, the better. So you have done the right thing by starting early.
But please be aware that the tax treatment for Unit linked pension plans is bad. So I have stopped advising anyone to take a ULPP. Instead I would advise investing via SIP in MF's or going for a ULIP with the least life cover. Both these options have better tax treatment than ULPP's.
I am a moderate risk taker and invest in instruments such as PPF and believe in the power of compounding... I was interested in the HDFC SLIC pension plan (invest for about 25 years),but also wanted to have a liberty of removing the entire corpus on maturity and re-investing (rather then get the pension) ..the bank authorities suggested that since I am not interested in the pension I can invest in a 25 year ULIP plan and withdraw the money on maturity..If I decide to have a pension I could put the money into a Fixed Deposit account at that point of time (because that's what the Pension funds will do) ...Should I opt for the ULIP plan (25years) or the pension plan? Also in case of ULIP how is the SumAssured calculated or can we choose it?
Pension plans are bad when it comes to tax treatment. Infact, I learned it the hard way since I actually took a UL pension plan and I will have to admit it was one of my investment mistakes.
Why Pension Plans are bad? 1. At the time of maturity, you can only withdraw 33% taxfree. You have to pay tax on the balance 66% if you wish to withdraw.
2. Prior to maturity if you withdraw your money, the whole amount is added to your taxable income, so you pay 100% tax on it.
In ULIP's, there is no tax at the time of withdrawal if you stay invested for 5 years. So all maturity benefits are tax free. So I would always advise taking a ULIP rather than a ULPP.
When saving for long term, investment in MF's and ULIP's make more sense because of the tax treatment.
Hello Raj, I am currently a policy holder of HDFC Standard Unit LInked Pension Plus Fund and am currently running in my 2nd year. The policy is for 29yrs. Can u tell me what are the taxes that i need to pay when i withdraw my policy 1.Before the stipulated term(29yrs) 2.After the policy term ends.
Plz elaborate your answer as i wont like to bother you anymore. Thanks Subham Das
Hi. I wanted to invest in HDFC ULIP for young stars plan. Would apprecite if you can throw some light on the plan and is it wise to invest in this ULIP. Also there are offering various funds in this plan where I can invest, in which category should one invest.
Ajay, HDFC Youngstar Plus is a good child ULIP. You might also want to check Kotak Headstart for child ULIPS.
The process for selecting ULIP's should be to get a illustration from the different companies and then compare. This should give you an idea about the charges.
Hello Raj, Wonderfull Job I must say. I have a query about investments. My age is 27. after management, 6 months into a software cpny. I have to invest around 80-85 thousands mainly for TAX saving and short term investments. I dont have any liabilities. My father is into his service right now. I dont have any insurance cover as of now. The confusion goes like this: 1. Should I invest in ULIPS or ELSS or both. WHat should be the percentage or breakup for ULIPS and ELSS. 2. ULIPS which schemes? which Company? My agent suggested me two LIC ulips Fortune Plus and Profit Plus? Ur comments on those. 3. Names ELSS MF's schemes which i shd look forward to? 4. Should I go for Traditional investment options like FD's and PPF for tax savings. I am looking forward for your advice. it wud help me a lot.
1. Should I invest in ULIPS or ELSS or both. WHat should be the percentage or breakup for ULIPS and ELSS.
Ans: Since you do not have any liabilities, and if none of your family is dependent on your income, then I would advise you to invest in ELSS. At a later stage when you need insurance, you can consider taking a pure term insurance plan or a ULIP.
2. ULIPS which schemes? which Company? My agent suggested me two LIC ulips Fortune Plus and Profit Plus? Ur comments on those.
Ans: As I have mentioned, stay away from ULIP's if you do not need insurance.
3. Names ELSS MF's schemes which i shd look forward to?
Ans: I would advise you to visit www.valueresearchonline.com. This site is a good start to research yourself on which elss schemes are good. My advise would be to invest in 5 Star or 4 Star rated funds.
4. Should I go for Traditional investment options like FD's and PPF for tax savings.
Ans: I would always advise investing in PPF. It has a good tax treatment. Yours investment and returns are exempt from taxes. Your investments also safe since they are backed by the government. It also gives you need the diversification into safe investments.
I was recently approached by a Financial Advisor from Aviva. After knowing my requirement for some Growth oriented investment he suggested me Freedom Life Plan. Can you tell me will be advisable to go for this plan and how is performance compared to its peers?
Dear Raj It was eye opener after reading through your blogs on ULIPS. Unfortunately I have invested in Money Plus and Market Plus. Is there a website where I can keep track of the shares they have invested? Also am NRI and can I invest in PPF or ELSS? Thanking you in advance
Hi Raj, Thanks for giving your suggestions/comments on questions from people like me.
I have a query here. I took ulip (HDFC standard life Young Star Plus) three years back. I didn't know about the different charges at the time when I took the policy and I failed to notice it from the policy document.
After reading some posts in different blogs, I realize that I should have gone for Mutual Fund instead of ULIP (because I have enough term insurance).
I have paid premium for the past 3 years for this ULIP.
Now I am in confusion whether should I continue paying premium for the rest of the policy term OR just stop it and start investing in Mutual Fund.
Is it possible to pledge ULIPS from ICICI Prudential which are redeemable in January 2010 now(in August 2009) and take a loan either from an individual or a bank?
Need to raise some money quickly and will appreciate your insight.
I am 26 yr old software engineer and have financial dependency.I want to invest in ULIP .Can you suggest me which plan will be ebst for me ? 1.HDFC young star supreme suvidha 2.Aviva Life freedom plan 3.Bajaj allianz i gain plan 4.SBI money back plan 5.or any other ? on the basis of returns and low costs i.e IRR which ulip plan should i take ? Also if i open a SIP account to invest in mutual funds from which fund house should i take can i take from hdfc as having a saving a/c there ? are these beenfits provided under tax benefits.. basically i am investing to have tax benefits and linsurance cover and very good returns.. awaiting for ur response ... plaease suggest me so taht i acn decide easily.
Hi Raj, This is Ashish. First of all many thanks for the info you are giving to all of us.
I have invested 70K in below ULIP's of HDFC: 50K- Unit Linked Endowment Plus II 20K- Young Star Supreme Suvidha Please provide ur feedback on this. Q1: I thought may be I could have done top-up of 20K on first policy? Q2: Performance and security wise how you rate them? Q3: I have additional 20-30K to invest according to my current financial situation & I have below options in mind: 1. LIC's Jeevan Saral 2. HDFC's MF top 200 3. LIC's Jeevan Suvidha 4. Post Office Scheme or PPF Plesae suggest.. Thanks in advance.
Can you please guide me about HDFC YoungStar Supreme Suvidha, i want to invest for my 4 years old daughter... though my objective is not too much return but atleast some value over my actual investment(i am willing to go for less risky investment)
Hi, I need your suggestion on my financial planning.
I am 29 yr old guy working in Software. My monthly earning around 60K. I have invested in below mentioned schemes. 1) HDFC youngster ULIP- 3000/Month 2) Kotak Ulip - 15000/ Year 3)Birla Sun life Ulip - 12206/Year 4) Max NewYork Traditional Money Back- 12800/Year 5) LIC Money Back- 5000/Year
I have a hime loan of 10L and Personal loan of 4L.
I feel somewhere I am wrong in my financial planning as all of these are already in 4th Year but not returning good and for few cases its -ve also.
Looking at this please suggest me if I need to stop some of these and start new one as most of the ULIPs are in 100% equity exposure.
I have taken an investment plan "HDFC Young Star Supreme Suvidha". I have paid two premiums as of now. I would like to know what is the future prospect for this scheme. My unit statement says my money is invested in "Balanced Managed Fund II".
All I want to know is ... is this a right option? will i be able to get the principle amount that I invested all this time??
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79 comments:
Hi,
What are your views on ULIPs as a pure investment plan?There are certain plans by Kotak and ICICI which guarantee your capital provided you complete the term.
Thanks,
Anshul Gupta
Mr. Anshul Gupta,
ULIPS are only for those who are seeking "Insurance Cover" along with "Investments". If you are not looking for "insurance" and purely for "investments" then ULIPS are not ideal place to invest.
I would recommend MF's or Post Office Small Saving Schemes for those whoes only objective is Investments.
Depending on your risk taking capabilities, the following is what I would suggest.
Donot want to take any risk:
Invest in Public Provident Fund. Currently guarantees 8.0% (backed by government of India).
Willing to take some risk:
Invest in a some good balanced MFs using SIP. My personal choice here would be HDFC Prudence, Franklin India Dynamic PE Ratio FoF. HDFC Prudence is the only fund which gave better returns than the Sensex every year for the last 10 years.
Willing to take higher risk:
Invest in a some good diversified MFs using SIP. My personal choice would be HDFC Equity, SBI Magnum Contra/Global, Sundaram Select Midcap.
If Capital Protection is your priority:
Option 1: Invest 3 Lakhs in Post Office Monthly Income Scheme. Guarantees an interest of Rs.2000 every month. Start an RD of Rs.2000 in Post Office. This would turn out to be equal to 11.0%+ guaranteed return. But the returns are taxable.
Option 2: Invest 3 Lakhs in Post Office Monthly Income Scheme. Guarantees an interest of Rs.2000 every month. Start an SIP of Rs.2000 in a good ELSS. This guarantees capital protection and also higher returns. My personal choice of ELSS are HDFC Taxsaver, SBI Magnum Taxgain, Franklin India Taxshield.
If you plan to invest for long term 5+ years, I think the chances of losing capital are very very minimal even if you invest in diversified equity MFs using SIP.
-Regards,
Raj
Hi,
Thanks for your comments.I totally agree with you that ULIPs are a lousy investment vehicles.But post July certain ULIPs also guarantee you the capital invested by you and also give you a 80% exposure to equity while rest in debt.There fees are higher compare to a diversified MF but then they give you a guarantee of your capital.
Minimum term is 10 years.What do u have to say on this?
Thanks,
Anshul Gupta
Dear Anshul,
Can you post the names of these ULIPS you are referring to so I can read their brochure about the actual guarantees offered.
To my knowledge Kotak has "Guaranteed Maturity" option, but I don't think even these ULIPS guarantee the "Capital(the total premiums paid)".
H,
I was talking about Kotak Safe Investment Plan 2.Please go through the website,you'll find all the details there.I would like to know your views about it as a investment and not as an insurance cover.
Thanks,
Anshul Gupta
Hi Raj,
Really enjoyed reading all ur blogs ...must say very very helpful.
I have a question regarding the Pension Plan Vs ULIPs.
If one is planning for a long term investment then seems like the Unit Linked Pension Plans have lot lesser charges as compared to ULIPs. I compared HDFC and ICICI liftime Pension plans with ICICI Lifetime II.
What do u say?
Jasjot
Dear Jasjot,
Regarding pension plans, I personally like Unit Linked Pension plan offered by HDFC. The following are the advantages of HDFC.
1) The returns of HDFC funds(equity and balanced) have been very good for the last two years consistently.
2) HDFC has the most competitive charges (Fund Management Charge and Administrative Charge). This will turn out to be a sizable savings especially on the long run.
Disclosure: I myself have a pension plan from HDFC SLIC.
-Raj
Dear Anshul,
I have gone through the details of Kotak Safe Investment Plan 2. The following are the charges associated with it.
Loading Charges: 14% of premium first year, 3.5% from year two onwards.
Admin Charges: 7% of premium first year, 4% from year two onwards.
Fund Management Charge: 1.5% for growth fund.
Mortality Charges: Based on Risk cover.
This ULIP guarantees your Capital(all premiums paid) and at the same time maintains an exposure of 40 - 80% in equities. It will not be able to generate the returns a good diversifed equity MF might generate (because of the charges associated each year). But inspite of this I think it is a decent ULIP to invest in mainly because of the capital guarantee it offers inspite of maintaining a high exposure to equity.
If your objective is maximizing returns, then I would still advise investing in a good diversified equity MF.
If you objective is maximizing returns with "Capital Guarantee", then Kotak Safe Investment Plan 2 is a good option. Please be aware you are also eligible for Tax benefits under Section 80C , 10D. Opt for the lowest "Risk Cover" if you are purely interested in returns (this will ensure you pay minimum mortality charges).
Hi Raj,
Thanks for your valuable comments and the pains taken.Capital is guaranteed only if you complete a minimum of 10 yr term and as you rightly said that chances of losing the capital are very less if one is invested for such a long period,i think investment in this ULIP will be a waste.Moreover,any Kotak Mf or ULIP has not posted good returns in comparison to other funds.Hence, i think its better to invest in a well known diversified fund.
Thanks,
Anshul Gupta
Hi!
Considering the privatisation of the insurance sector, would you still prefer the traditional cash back schemes of LIC.
Thanks harmeet
Dear Anshul,
Returns wise a diversified MF will always be better than any ULIPs since you don't have to pay all the charges.
Fund performance wise, ULIP funds have been performing well. For instance the last 1 year returns of Kotak and HDFC ULIP funds have been 59.12%, 56.44% respectively. This is comparable to the returns of a good ELSS like HDFC Taxsaver, SBI Magnum Taxgain whoes returns in the past one year have been 56.22%, 54.55% respectively. (I have compared against ELSS since both these investments offer tax benefits under section 80C).
-Raj
Dear Harmeet,
I am a BIG NON BELEIVER OF traditional endowment/cash back plans from LIC for the following reason.
1) Returns wise, I don't think they beat inflation.
2) There is no compounding effect on your investment (The bonus declared is always on the sum assured).
3) They have fixed maturity dates. You don't have the flexibility to withdraw money when you actually need it (The only option is taking a loan on your investments for which they charge additional interest).
4) The policy can lapse if you don't pay your premium within the specified time frame (even if you had been regularly paying your premium for say 10 years)
5) The risk cover is very less compared to the premium paid.(You have some ULIPS that provide risk cover upto 125 to 150 times the premium paid).
-Raj
Hi Raj,
I have another question regarding Unit Linked Pension Plan.
The HDFC Pension Plan, allows you to surrender the policy after 3 years without deducting any charges. I want to know what are the tax implications on the amount received after surrendering the policy.
And are there any other hidden charges in doing so?
Jasjot
Dear Jasjot,
You will need to pay tax on surrendering pension plan prior to vesting date. Pension plans are suited for those who plan to save for long-term towards their retirement.
The proceeds from regular ULIPs (not pension plans) will not be taxed under Section 10(10D).
-Raj
Dear Satish,
Market Plus by LIC is a Unit Linked Pension Plan. I have just read the offer document. You have a lockin period of 3 years on your investment.
1)Your parents won't be able to surrender the policy for 3 years.
2)The policy does not allow partial withdrawals. Your only option for withdrawal of money is to surrender.
3)Charges wise, it is ok and is comparable to other ULIP pension plans.
Performance wise, I am not a big beleiver of ULIPS from LIC. I would rather buy an ULIP from a private insurance company rather than LIC.
Could you please brief me about "Jeevan Plus" ULIP offered by LIC?
When can one surrender the policy completely?
Dear Vinoth,
LIC is not selling Jeevan Plus anymore. But here is a brief review of the plan.
1) It is a whole life plan. So it will give you life cover through out the policy holders life.
2) The Death Benefit = "Sum Assured" + "Fund Value". This is good and better than most ULIPS.
3) The initial loading charges are reasonable.
4) You can surrender the policy anytime after 2 years premiums have been paid without any surrender charges.
5) You can also make partial withdrawals.
Overall, it is a decent ULIP. But my main concern regarding LIC ULIPS have always been its performance.
Hi,
This may be a peculiar question to you. Consider yourself as an unmarried software programmer aged 24 with an annual income of Rs.3lakhs. You want to Save as well as avoid paying tax. You are not covered with any insurance till now. Will you choose investing in - ULIP's or ELSS?. Please explain in detail the reason for the same.
Dear Sundar,
The answer to your question depends on your answer to the below questions.
1) Do you have any liabilities like loans that you need to repay (house loan or any other loans).
2) Do you have any dependents (I know you are not married, but are your parents dependent on you).
If the answer to any of the above questsions is an "Yes" then I would advise you to invest in ULIPS (since you will need insurance cover to repay your liabilities or to provide something to your dependents).
If the answer to both the above questions is a "NO", then I would advise you to invest in ELSS.
Regards,
Raj Vuppala
Hi,
I went through all the views posted in this site but its surprising that no one has mentioned about Metlife's Met Smart - ulip plan. According to my knowledge, it is one of the best plan available in the market if the term we are luking is more than 10 years. The reasons are 1] coverage upto age 100 2] 6 fund options 3] 4 switches/ year are free between funds 4] 2 free partial withdrawals/year 5] charges are one of the least in the industry 6] invests only in nifty - so stable returns. I request your view on the same.
Hello Raj,
Thank you so much for sharing this investment tips and info. Great !!!
I have this doubt. Currently, I am holding a pension plan from LIC(Jeevan Nidhi) and paying 10K per anum. Now I am planing to pledge some more amount in to my insurance pool. Will it be wise to take one more Pension plan (ULP) or invest in some other ULIPs or MFs. Please advice. This is my insurance info
Personal Details - 26Years/Men ( S/W Engg).
1) LIC Jeevan Anand - 5Lakhs( 39K per year)
2) LIC Jeevan Nidhi - 10K for 26 Years
3) ICICI LifeTime - 18K per year
4) SBI Term Insurance - 25Lacs
5) SIP with SBI - 5K per month
I missed PPF, and planing to put some amount. But sometimes I feel,I have less amount in Pension Plan. What is your advice? I have an additional 50 to 60K per month for investing. Please suggest the right path.
Thanks
Renju.
Hello Raj,
Its me again ( Renju ).In my previous post, please read I have an additional 50 to 60K per month as I have an additional 50 to 60K per YEAR.
Thanks
Renju
Dear Renju,
Sorry for my late reply. Please take some time to answer my below questions.
Are you adequately insured to meet all your curent and future liabilities??
If the answer to the above question is a "NO", then I would recommend you taking an ULIP.
If the answer to the above question is an "YES", then I would recommend investing in MF's.
- Raj
Hi,
I want to invest in ULIP and would like to know which ULIP would be a better choice for investment(Bajaj Allianz, HDFC SLIC, ICICI Prudential, Kotak, SBI)
Thanks
Hi,
Which of the following is better for an investment of 50,000/pa for 20 years.
- HDFC YoungStar Plus
- HDFC YoungStar
- Aviva Freedom Life Plan
Can you suggest some other plan for the same please. I am totally confused. First I signed up for YoungStar then Aviva Freedom Life. Then somebody told me about the higher FMC in Aviva. Now I have surrendered the Aviva as well.
Thanks & Regards:
Joga
Charges wise, HDFC ULIPS are the cheapest. They will work out the best over the long run due to very low fund management charge. Hence my personal choice would be HDFC Young Star Plus.
Hi,
I have invested 50000 in ICICI predential ULIP under balancer mode. Can you plz tell me is it good to invest these money in ULIP? and how abt its returns?
It will be great helpful for me if you can answer my query and if possbile give me the link whre I can findout its returns.
Thanks & Regards,
Ashish
An MLM company has offered a ULIP from Bajaj Allianz wherein the premium is Rs.12,000 for 3 years and the sum assured is Rs.4 lakhs. They are also claiming to create an 8 lakh return after 20 years.
what's your take on this?
And do you think that the tax benefits are sustainable over time?
Ashish,
Sorry for my late reply. Check out the site bajajcapital.com. The keep track of the performance of the different ULIPS under the section "ULIP Monitor". You can check the performance of the fund you invested.
-Raj
Badri,
First, I would like to understand your investment objective.
If you are looking for "Maximum Returns" and "Tax Benefits" then I would recommend investing in Mutual Funds.
ULIPS are for those who need insurance cover.
-Raj
Hi,
I already have one insurance plan.
Ulips has the flexibility to switch between the plans and also the Insurance cover can be decided by the Investor.
Considering this, Does ULIP work good than mutual funds? My agent always suggest for ULIP. I am little bit confused on reading this. He says that Tax saving mutual fund is always 80,20 and are inflexible.
Also tell me how much of my money will be wasted for fund management, if iam planning to invest in ICICI Ulip 30000 premium.
Hi Raj Gopal,
Thanks a lot for your view, its really helpful to for the investors.
Raj i have a question im 23 yrs old im looking for some investments schemes for savings and tax benefit i have only 1 insurance policy jeevan anad with LIC what dou you suggest me ..whereas everyone is suggesting me for HDFC young star linked plan
Hi Arun,
Are you looking for insurance cover or pure investments.
If you are only looking for investments/returns then I would suggest investing in Tax Saving Mutual Funds (ELSS).
If your term of investment is short (less than 10 years) then again only invest in ELSS for saving taxes.
If you need insurance and are willing stay invested for long term like 15 years ore more, then you can think of ULIPS. Yes ULIPS have the flexibility to move funds between equity and debt. This is one feature which works on the long term especially say after 10 years if you wish to reduce your risk by reducing exposure to debt.
Regarding ULIP's, my personal choice is HDFC ULIPS. They work out to be the cheapest in terms of charges over the long run.
-Raj
Hi Gaurav,
First you need to write down, what your investment objectives are.
1) Purely investments (making money)
2) Insurance cover with investments
3) Retirement planning
Let me know what your objective and goal for investment is.
-Raj
Hi Raj,
Thanks for your reply.My prime obj is returns from savings.However i want to save for long term as u never know wat i will be earning in late 5otys where u need money at prime.
Kindly suggest wat should be prime saving for guy at age of 23. is it returns or long term saving ??
Gaurav,
This is what I would suggest you. Of the total amount you wish to invest, put 75% of the amount in a equity mutual funds and the balance 25% in a ULIP pension plan.
Mutual funds will help generate returns at an aggresive pace. At the sametime they offer the liquidity if you wish to withdraw money at anytime.
The ULIP Pension plan will lock your money for longterm towards retirement. The pension plan that I have is from HDFC standard life. I would recommend the same for you. (This pension plan has high initial loading charges, but extremely low fund management charge). So on the long run for an investment term of 25+ years, it works out to be the cheapest.
Check out my article on which charges are the most important which will explain why fund management charge is soo important.
Hi Raj,
I have invested in ICICI Prulife ULIP maximiser option. I tried to utilise the switch option provided by them. When sensex was at 10k february 2006, I switched to protector option, thinking that market will come down. But it went on making new highs of 12600 in may. I thought of missing the rally and shifted back to maximiser in may. Eventually there was a crash and my net worth has reduced a lot. Since then I left as it is in maximiser. It has recovered since then. As of now, my units worth is less than what it was in feburay 2007.
Since the market is at all time high, would you advise me to switch to protector/balancer or continue with the maximiser option.
Thanks in advance.
very nice thread, i have some very basic query,
1. can some explain the following terminologies clearly
a.ELSS
b.ULIP
c.SIP
2. I have some amount , about 1 lakh, which i want to invest, i dont want tax exemption, and dont have much responsibilities, where do you suggest i should invest?
Dear Mr Vuppala,
Should I invest in Bajaj Allianz's New Family Gain ULIP? I am not interested in insurance. I am interested only in IT benefit and decent rate of interest/growth. Your suggestion.
If you are only interested in tax benefits and not interested in insurance, then ULIP's are not for you. I would strongly advise investing in Tax Saving Mutual Funds (ELSS).
Hi Raj
My self Ashish and my age is 26 and i am new in this field.I want to invest my money in MF's for Tax saving and maximum return purpose. Accordig to market condition is it right time to invest in MF's? Please suggest some MF names in which i can invest my money.
Should i take SBI Megnum tax saving MF's at this time or some other MF's or schemes?
Please suggest.
Thanks and Regards
Ashish
I really appreciate for your time and dedication Raj. I have a very simple question :-
1) I have two LIC schemes 10K + 10K
2) Have PPF account
3) Now I want to invest for my child future. Please let me know which one should be best.
THanks in advance.
Hi Raj,
Your has been really helpful to me in understanding how i go about making my investment! Thanks a lot.
I may email you if i get any doubts later on.
Thanks,
Ameen
Hi Raj,
I am Nizamuddin software engg.I hv ULIPS from LIC and ICICI Pru.I am planning to invest ULIP in Bajaj Alianz but u always suggest HDFC is best for ULIPS,can u please justify me so that I will also choose from HDFC and also suggest the ULIP name from hdfc.
Hi Raj,
I m working wid MNC. I want to invest aound Rs.50000/- annual premium in ULIPS as i do not have any life cover till yet and also i want to have decent returns. So suggest me which ulips shud i invest.
waiting 4 ur reply
Thanks
Sandeep
Hi Raj,
I am 24 yrs old unmarried S/W Professional, I am a bit confused over invetments for insurance. It will really help if I get some advice from you.
Currently I have a ULIP from Bajaj Allianz.. 20K/Anum Premium (5 Lakh cover).
Is the above ULIP plan is good accorcing to you? Since I am bit regreting due to low cover of just 5Lakh for 20k premium.
Also I have family dependcies and in future I might go for Home loan above 25Lakhs.
So I think I should have life cover of 45-60 Lakhs. Is there any insurance product available in market which could provide such cover at low premium of 10-12K ? and also I am expecting returns of premuim paid at maturity.
Rest of the investment I am planning to do in ELSS- SBI magnum, HDFC Taxsaver and Reliance/Franklin. Please let me know your opinion on this.
Please reply soon as I want to invest ASAP.
Thanks in Advance,
Ajay.
I apologize for not being able to answer any of your queries.
I have been busy and had not had the time to update/review the blog.
Gone through all question! well it was like a FAQ on ULIP. most of my queries are answered. Thank You very much.
Hi Raj,
Which is the best Pension plan to invest in. I am currently 28yrs old and want maximum returns when I become 45-50 yrs old. Please suggest !!
-Sandeep
hi raj,
i have gone throug most of ur reply they r nice, but a few thinks i wld like to know ......r u working for hdfc standard life in most of ur comment i have seen promotion of ulip through hdfc..... r u aware of the chrges that they deduct or any other private insurance company deduct ........nearly 60% r deducted ....then there r surreneder charges ....i need to know whether the govt insurance company have any surrendr charges....u have also written that u dont beleif in the state run lic b.coz they havent given a decent return is that true,..... how abt bima plus or jeevan plus or future plus .....lic...in the down market when the market crashed they only losse 10 to 12%....where as for private companies it has gone to 19 to 25 % secondly before commenting just go through how much lic invest in equity and how much in money market instuments.....and traditionla planr meant for giving risk cover with a decent return at the end ..thats is more than 8 to 12% percent as per plan and term.....thirdly never compare any pivate company with the asia ,s biggest financial institute ....that is lic......is any company in profit or say surplus even after 8 yrs in the indian inurance market including ur fav,.. hdfc.... thanx
Hi,
Let me clarify your questions.
1) Do I work for HDFC Standard Life? NO. I am not an insurance agent and I do not work for any insurance company.
2) Regardings returns, we cannot come to a conclusion based on short time frames.We need to look at consistency of returns over long term to be able understand which ULIP's are performing better. I have used a sample size of 3 years for comparing returns. Kotak and HDFC ULIP's have been the top performing funds over a period of three years.
3) Regarding available funds, risk management. All ULIP's have multiple funds to select from which are a combination of equity and debt. One needs to decide the fund he wants to invest in based on his risk apetite. So I would compare equity funds to equity funds, balanced funded to balanced funds. It will not make sense to compare equity funds against balanced or debt funds.
4) Regardings traditional endowment plans, I have not come across any plans which gave a return of 8 to 12%. Usually the returns are in the range of 4.5 to 6%. If you know of endowment plans that offer 8 to 12% returns, please do share the information with me and I will be more than happy to evaluate and suggest these plans to others.
Thank You,
Raj
Hi,
I want to know whether I should invest in ULIPS. My annual income is 3.5 lacs and looking for tax saving schemes. I am single with no dependents, no liabilities like house loans etc. Could you advise on whether investing in ULIP is a good option. I have investments in MF schemes like Reliance Vision, reliance growth, reliance power diversified, HDFC equity, HDFC balanced, SBI Magnum tax saver, SBI Magnum Global, Reliance Equity Advantage Fund, JM Equity & Derivative Fund etc. I also have an investment in stocks.
So should I invest in Metlife's SmartPlus ULIP or invest in ELSS schemes.
Regards
Melvyn Farro
Dear Melvyn,
For pure tax saving purposes, always invest in ELSS.
The following are the ELSS schemes that I would currently recommend investing in.
1) Sundaram Taxsaver
2) DSPML Taxsaver
3) DWS Taxsavings
If you would like me to review your current MF portfolio, please do send an email to info@costaverager.com with your current holdings in the different MF schemes.
Thanks,
Raj
My annual income is Rs.5,00,000/-, rite now i have am only investing money in Post's Recurring scheme...I want to invest in short-term schemes and want to save tax also... as I am planning to buy a house in near future so dont want to block the money. Could you suggest me some good schemes or MF's. Further, If I want to go for ULIP which is a good insurance cover.
Dear Prasanna,
I am currently out of town and will be back this thursday. Please send me an email to info@costaverager.com so I can send you a personalized plan.
I would advise investing in liquid debt funds until you buy your house. Stay away from ulips until you know what your cashflow is like after you buy your home.
Dear Prasanna, I have sent you an email regarding your query.
Thank You,
Raj
hi
I took ICICI retirement plan, is this right time to take this plan, I am 28 year old,
Dear Dhiraj,
The earlier you start planning for your retirement, the better. So you have done the right thing by starting early.
But please be aware that the tax treatment for Unit linked pension plans is bad. So I have stopped advising anyone to take a ULPP. Instead I would advise investing via SIP in MF's or going for a ULIP with the least life cover. Both these options have better tax treatment than ULPP's.
-Raj
Raj,
I am a moderate risk taker and invest in instruments such as PPF and believe in the power of compounding...
I was interested in the HDFC SLIC pension plan (invest for about 25 years),but also wanted to have a liberty of removing the entire corpus on maturity and re-investing (rather then get the pension) ..the bank authorities suggested that since I am not interested in the pension I can invest in a 25 year ULIP plan and withdraw the money on maturity..If I decide to have a pension I could put the money into a Fixed Deposit account at that point of time (because that's what the Pension funds will do) ...Should I opt for the ULIP plan (25years) or the pension plan? Also in case of ULIP how is the SumAssured calculated or can we choose it?
Dear Farooq,
Pension plans are bad when it comes to tax treatment. Infact, I learned it the hard way since I actually took a UL pension plan and I will have to admit it was one of my investment mistakes.
Why Pension Plans are bad?
1. At the time of maturity, you can only withdraw 33% taxfree. You have to pay tax on the balance 66% if you wish to withdraw.
2. Prior to maturity if you withdraw your money, the whole amount is added to your taxable income, so you pay 100% tax on it.
In ULIP's, there is no tax at the time of withdrawal if you stay invested for 5 years. So all maturity benefits are tax free. So I would always advise taking a ULIP rather than a ULPP.
When saving for long term, investment in MF's and ULIP's make more sense because of the tax treatment.
Thanks,
Raj
Thanks for the invaluable insight
Hello Raj,
I am currently a policy holder of HDFC Standard Unit LInked Pension Plus Fund and am currently running in my 2nd year. The policy is for 29yrs. Can u tell me what are the taxes that i need to pay when i withdraw my policy
1.Before the stipulated term(29yrs)
2.After the policy term ends.
Plz elaborate your answer as i wont like to bother you anymore.
Thanks
Subham Das
Hi.
I wanted to invest in HDFC ULIP for young stars plan. Would apprecite if you can throw some light on the plan and is it wise to invest in this ULIP. Also there are offering various funds in this plan where I can invest, in which category should one invest.
Thanks
Ajay
Ajay,
HDFC Youngstar Plus is a good child ULIP. You might also want to check Kotak Headstart for child ULIPS.
The process for selecting ULIP's should be to get a illustration from the different companies and then compare. This should give you an idea about the charges.
-Raj
Hello Raj,
Wonderfull Job I must say. I have a query about investments.
My age is 27. after management, 6 months into a software cpny. I have to invest around 80-85 thousands mainly for TAX saving and short term investments. I dont have any liabilities. My father is into his service right now. I dont have any insurance cover as of now. The confusion goes like this:
1. Should I invest in ULIPS or ELSS or both. WHat should be the percentage or breakup for ULIPS and ELSS.
2. ULIPS which schemes? which Company? My agent suggested me two LIC ulips Fortune Plus and Profit Plus? Ur comments on those.
3. Names ELSS MF's schemes which i shd look forward to?
4. Should I go for Traditional investment options like FD's and PPF for tax savings.
I am looking forward for your advice. it wud help me a lot.
1. Should I invest in ULIPS or ELSS or both. WHat should be the percentage or breakup for ULIPS and ELSS.
Ans: Since you do not have any liabilities, and if none of your family is dependent on your income, then I would advise you to invest in ELSS. At a later stage when you need insurance, you can consider taking a pure term insurance plan or a ULIP.
2. ULIPS which schemes? which Company? My agent suggested me two LIC ulips Fortune Plus and Profit Plus? Ur comments on those.
Ans: As I have mentioned, stay away from ULIP's if you do not need insurance.
3. Names ELSS MF's schemes which i shd look forward to?
Ans: I would advise you to visit www.valueresearchonline.com. This site is a good start to research yourself on which elss schemes are good. My advise would be to invest in 5 Star or 4 Star rated funds.
4. Should I go for Traditional investment options like FD's and PPF for tax savings.
Ans: I would always advise investing in PPF. It has a good tax treatment. Yours investment and returns are exempt from taxes. Your investments also safe since they are backed by the government. It also gives you need the diversification into safe investments.
Thanks,
Raj
I was recently approached by a Financial Advisor from Aviva. After knowing my requirement for some Growth oriented investment he suggested me Freedom Life Plan. Can you tell me will be advisable to go for this plan and how is performance compared to its peers?
Thanks in advance
Regarding the pension plans can you throw some light ....
How are the offers from hdfc ?
Dear Raj
It was eye opener after reading through your blogs on ULIPS.
Unfortunately I have invested in Money Plus and Market Plus. Is there a website where I can keep track of the shares they have invested?
Also am NRI and can I invest in PPF or ELSS?
Thanking you in advance
Hi Raj,
Thanks for giving your suggestions/comments on questions from people like me.
I have a query here. I took ulip (HDFC standard life Young Star Plus) three years back. I didn't know about the different charges at the time when I took the policy and I failed to notice it from the policy document.
After reading some posts in different blogs, I realize that I should have gone for Mutual Fund instead of ULIP (because I have enough term insurance).
I have paid premium for the past 3 years for this ULIP.
Now I am in confusion whether should I continue paying premium for the rest of the policy term OR just stop it and start investing in Mutual Fund.
Could you please suggest me.
Thanks
Thamarai.
Hi Raj,
I have a question regarding the ULIPS, i paid last 3 yrs. wat is your suggestions interms of paying premium or stop.
Is it possible to pledge ULIPS from ICICI Prudential which are redeemable in January 2010 now(in August 2009) and take a loan either from an individual or a bank?
Need to raise some money quickly and will appreciate your insight.
Thanks
Srini
Hi Raj,
I am 26 yr old software engineer and have financial dependency.I want to invest in ULIP .Can you suggest me which plan will be ebst for me ?
1.HDFC young star supreme suvidha
2.Aviva Life freedom plan
3.Bajaj allianz i gain plan
4.SBI money back plan
5.or any other ?
on the basis of returns and low costs i.e IRR which ulip plan should i take ?
Also if i open a SIP account to invest in mutual funds from which fund house should i take can i take from hdfc as having a saving a/c there ?
are these beenfits provided under tax benefits..
basically i am investing to have tax benefits and linsurance cover and very good returns..
awaiting for ur response ...
plaease suggest me so taht i acn decide easily.
thanks
mohit
Hi Raj,
This is Ashish.
First of all many thanks for the info you are giving to all of us.
I have invested 70K in below ULIP's of HDFC:
50K- Unit Linked Endowment Plus II
20K- Young Star Supreme Suvidha
Please provide ur feedback on this.
Q1: I thought may be I could have done top-up of 20K on first policy?
Q2: Performance and security wise how you rate them?
Q3: I have additional 20-30K to invest according to my current financial situation & I have below options in mind:
1. LIC's Jeevan Saral
2. HDFC's MF top 200
3. LIC's Jeevan Suvidha
4. Post Office Scheme or PPF
Plesae suggest..
Thanks in advance.
Hi Raj,
Can you please guide me about HDFC YoungStar Supreme Suvidha, i want to invest for my 4 years old daughter... though my objective is not too much return but atleast some value over my actual investment(i am willing to go for less risky investment)
thanks n regards,
Dinesh
Hi,
I need your suggestion on my financial planning.
I am 29 yr old guy working in Software. My monthly earning around 60K.
I have invested in below mentioned schemes.
1) HDFC youngster ULIP- 3000/Month
2) Kotak Ulip - 15000/ Year
3)Birla Sun life Ulip - 12206/Year
4) Max NewYork Traditional Money Back- 12800/Year
5) LIC Money Back- 5000/Year
I have a hime loan of 10L and Personal loan of 4L.
I feel somewhere I am wrong in my financial planning as all of these are already in 4th Year but not returning good and for few cases its -ve also.
Looking at this please suggest me if I need to stop some of these and start new one as most of the ULIPs are in 100% equity exposure.
--Thanks
Biranchi
Hi Moderator,
I have taken an investment plan "HDFC Young Star Supreme Suvidha". I have paid two premiums as of now. I would like to know what is the future prospect for this scheme. My unit statement says my money is invested in "Balanced Managed Fund II".
All I want to know is ... is this a right option? will i be able to get the principle amount that I invested all this time??
Your views on it will be greatly appreciated.
Thanks in Advance.!!
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Westlake Village Insurance
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