With the launch of Smart ULIP, now SBI Life Insurance too has joined the bandwagon of ULIP market. Similar players in the market include LIC jeevan Varsha, ICICI Return Guarantee Fund, IDBI Fortis Bondsurance and Birla Sun Life Platinum Plus. You can read my take on those policies by following the links mentioned for each of those. Now, here is a quick review of SBI life Smart ULIP.
As usual, first the good things about this product:
- The Smart ULIP product provides NAV guarantee that is the highest of 168 fortnightly NAVs during first seven years or NAV at maturity, whichever is higher.
- In case of the unfortunate event of the death of the insured during the policy term, the nominee receives the higher of fund value or sum assured.
- Shorter premium paying term (3 or 5 years).
- Tax benefit on both premiums [U/s 80C] and maturity amounts[U/s 10(10D)]
- Investment is managed by SBI Life – policy holder need not panic in volatile market
Now the bad:
- Short term – just 10 years!
- Too many charges
- Premium allocation charges : 15% in 1st yr, 5% for next 2-4 yrs for 3-5 yrs terms respectively.
- Admin charges – Rs 60/- per month for full term.
- For first three years, annual administration charges of Rs 5 per 1000 of sum assured.
- Fund management charge 1.5% pa. Fund management charge can be increased to 2.5% pa
- Mortality charge levied on 1st day of each policy month.
For more details on this product check the brochure and see the benefit illustration here.
Verdict:
This product may appear to be better than other ulip products in the market but not better than a combination of mutual funds with term insurance. I still suggest you folks not to combine insurance with investment. Invest of specific products for each purpose and reap the best benefits from each of those. I know many of you may not agree with me, again it boils down to individual requirement and the phase at which an individual looks at these products. Whatever the case may be, I welcome your comments and suggestions.
…
{ 192 comments… read them below or add one }
At least SBI made an honest effort in saying the various charges involved upfront unlike other ULIPs. I think these charges are not too high Mohan, when compared with other ULIPs in the market.
Charges are too high. I am agree with Mohan that we should separate our investment with insurance. But it is too difficult to do.
Charges for annual premium 50000 are as follow
1) 7500 Premium allocation charges
2) 720 Policy admin charges
3) 1250 Sum Assured related charges
4) 624 Fund Mgmt Charges (@ 6% gain) subject to higher if u think gain is more.
5) 428 Mortality Charges
6) 1301 Service Tax
Total charges 11823
Fund invested are 50000 – 11823 = 38177
This is for first Year
For 2nd and 3rd years charges are around 6912 and 7623.
So think twice before go ahead. You are paying 1.5 lac in 3 years and investing only 1.2 lac. Now again you will get the unit on the basis of amt u pay per year that will decreasing as NAV get high and high. And in the last you will get highest NAV.
Forget about charges and everything I purchases it with N.A.V. of 8.79 and now highest NAV is 15.40 almost double I have recovered all the charges and buy same plan for my spouse again @ 14.10
dear sir,
I am a SBI pensioner.
1 ) Pl advise the total charges I had to pay in the first year and 2 nd 3 rd years in case of my investing 50000 per year for 3 years and what is the amount of charges in case of my wife invests in this plan.
2 ) In case of death of the policy holder when the insurance amount will be paid to the nominees (whether it is after completion of 10 years from the date of the policy or in the usual way of other life insurance policies)
Dear Sandeep,
Well done buddy for an accurate analysis & verdict.U got it right
this is just like any other ULIP with some changes. thats it 4/10 only.
Mohan is right Insurance has to be separated from Investment then
one will do good.
Manoj
@Deepak
Yup. This is the first product I have seen with so much clarity being provided to the customer upfront.
@Sandeep Garg
True. But all other similar products in the market aren’t any different. Just that they don’t show all the charges opaquely.
Thank u Sandeep
u are calculating my way. Many do not know about these charges and the agents used to lure the people for high returns if the market is “BULL”. Otherwise it is ” HELL ” like now. the index was 21 thousand plus and now 10 th plus !
Hi Mohan, thanks for all the details on SBI Life smart ulip. Now my question – Is there a better ulip than this in Indian market? Can someone provide me details with comparison please?
sir, i am planning to invest 1.5 lakhs ( 3yrs). how much i can expect at the end of 7th year. pls inform present nav of smart u lip
I Would Like to Make One Thing Very Clear That in This Plan the Returns Are Gong to Be the Maximum. I Hope if U Pay for 3 Tearms
I Expect That U Will Get a Approximate Value of Rs 6,00,000/-.
Furthet if U Have Any Query U Could Get in Contact With Me.
Thank
Happy Investing.
@Chirantan
Please reply sir
I m currently working with SBI Life and
Unit Values for SBI Life – Smart ULIP Plan options as on 11/04/2009
Fund Name Unit Value (Rs. / unit)
FlexiProtect Fund 11.39
Money Market Fund 12.33
how much i can expect at the end of 7th year with this plan ..Please be true to with the facts …
If we go for smart ulip then how much i can expect at the end of 7th year with this plan ..Please be true to with the facts … you can suggest us the approx amount …..
extraordinary work….liked it much ….thank you…
My first question is: How much is the expected return at the end of seven years with an investment of Rs. 1.5 lac through three years. Please mention the higher as well as lower side.
Second question is: What is the other product compareable in the line of this product.
If I invest for smart ulip then how much I expect after 10 years maturity with an investment of 1.5 lac in three years? I want details.
@gaurav
my question is;how much is the expected return at the end of seven years with an investment of RS.1.5 lac through three years.
Dear Sir,
My first question is: How much is the expected return at the end of seven years with an investment of Rs. 1.5 lac through three years. Please mention the higher as well as lower side.Can I withdraw this money after 3 years? as my agent told me that i can.
Is it the correct time to invest in SBI ULIP plan?My agent didn’t tell me about all this charges, just i know that they will charge Rs. 4500/- for first year.not to combine insurence with investment, i didn’t get it ? In SBI smart ulip plan do we have this option ?
Hi all, most of you have been asking what would be the return after n number years if i invest x amount. To answer your question, there is no specific number that I can quote. Since it is a ULIP, it is subject to market variations. It completely depends on how the fund manager takes care of your investment. Please talk to the concerned agents and they will be able to give you approximations based on some numbers.
Return is guarenteed. put 1.5 and get 2.5 min. guarentee. or more. so i did not understand why bother all charges etc. any one can get min. 2.5 or more if NAV is more while withdrawing.
do u guys agree with me?
@Dear Ravi,
In SBI life website they have mentioned a calculation for 3years premium (total 1.5L), return @10% ROI will be 2.52L.
If you invest the same amount in Postoffice MIS and you can get around 3.0L @ 10yesrs.
so, 50K more than sbi smart ulip
Sir,
If I invest for smart ulip then how much I expect after 10 years maturity with an investment of 1.5 lac in three years? I want details.Please reply sir
@Ravi
I didn’t quite understand your statement. Could you elaborate on that please?
@Suresh
Please check their website for detailed calculations and deductions. If you get a chance to talk to their customer care, bring out such questions and get all your queries clarified.
hello mohan, thanks for the detailed info abt this Plan..But i would like to invest 50,000 this year for tax saving..This morning i talked to my agent and he told me abt this..I thought to invest in this plan..But after seeing these discussions..I have a backlog..So please suggest me in which i can invest with maximum profits..?
Sir,
If u want to invest for tax purpose, i suggest you to go for LIC’s Market Plus-I with Bond or Balanced/Growth fund option with Single premium only. U wl get exemption as well as ur money will double in 5 years max. Think abt this. Regards.
SBI did a goof up on this one…when there employees contacted us to buy the polivy they said that return will start from 4th year onwards and the policy came stating that return will come only after 5th year completion i.e. in 6th year…so that is no good for me anymore…i ams tuck i want my money back as i feel cheated by SBI…and i donno how to do that…because they are not going to give it back that easily…SBI Sucks…they promise something and give something else…they are among the worst cheaters almost equitable to ICICI…
true.
ULIPs are actually a con-job. They have too many hidden charges, non-transperant and little flexiblity for withdrawal.
Mutual Funds are a much better option. Even Mutual Funds nowadays offer Life Coverage.
Srikanth
@sureshkumar
Anticipated Value of 6.71 Lakhs. At present the NAV is 13.77, which is guaranteed.
Could you please do analysis of Kotak Dynamic Floor Fund?
Namaste sir,
I have a ulip account.
I want to know the details about my account.
How can I get information about my account through online?
please tell me.
1. If I invest for smart ulip then how much I expect after 10 years maturity with an investment of 1.5 lac in three years?
2. What is the other product compareable in the line of this product.
Rajesh, only the agents can give you some projection based on some growth rate. There are many products. I have written reviews on
# Bajaj Allianz iGain ULIP
# BSLI Platinum Plus – review & analysis
# ICICI Return Guarantee Fund
You can take a look at them
Great! work Mohan. But, i think there is one benefit with ULIP that fund manager get more time to play with the money as all investment are long term, so there is high probability that money will grow more with ULIP.
i am also thinking of investing in ULIP, but I’m bit confused that i should go for ULIP or MF and insurance plan.
Chandan, you are right about the fund manager doing all the work for you. But remember it comes at the cost of various charges levied on you. Money does grow with ULIPs. My suggestion is don’t combine multiple things with one product. If you are looking at insurance go with term insurance that gives you very high risk coverage at a very low premium. For investment purpose, chose a plan that yields highest returns. That is the thumb rule I follow for my investments
Dear Mohan,
It is the buyer’s market condition and competitive market environment that forces SBI Smart ULIP and bajajallianceigain to come with full details.
But I still stick to my opinion that there is no necessity for combining insurance with savings. If you want insurance cover go straight away for a term assurance policy. For Savings choose other routes like, PPF, Mutual Funds and Company fixed deposits. This linking up savings with insurance cover does not give any real benefit except the benefit of better business for insurance companies.
Elaya Kumar S
That is a very reasonable opinion and I agree completely with that
Hi Mohan and sandeep Garg.
First let me thank you for the detailed survey of the plan. Being a new investor, these details are quite valuable for me. I agree on the fact that, we need to take some time to plan our future to select right Insurance scheme for insurance alone plus the right investment plan for right saving. We should not mix them up.
Now can u ppl let me know better Insurance term policies available and better MFs available or the blogs i can refer to..
I’m at the age of 24 in IT. So needed to put save money to rescue myself when needed. Also can anyone clarify me whether the money we deposit for Fixed deposit (not the return) is Tax explicable.
Thanks in Advance
Mr. Venkat,
If u do fixed deposit with banks, u wl not get tax exemption.
Regards
Hello.
Thanks for the details on all the policies. Considering that insurance & investment should not be linked, can you suggest a good investment option for a period of 15 yrs -20 yrs where one can generate money for child’s education
Thanking you in anticipation.
Best is PPF, to get advantage of compounding interest suggested to invest Max at the yearly years.
if you put a little effort, post office MIS is one of the best which gives 10.5% at end of 6years.
Can you please clarify your comments with figures, if possible…
Really this would mean a lot to me
Hi Soneeka
Thanks a lot for your comment.I have a better idea of an option in suggesting you a good investment option for a period of 15 yrs – 20 yrs where one can generate money for child’s education.That is the only insurance in India which gives you more in return.RELIANCE INVESTMENT PLAN.
Hello Mohan,
Am thinking of doing investment with SBI ULIP plan. Can you please let me know whether this is the fruitful plan ? How much is the expected returns of this plan at the 7th year?
Also, can you please gimme an idea about the other investment plans which will be useful for constructing our house?
Thanks in advance,
Nisha
Hi Mohan,
Thanks for the sugessions, I would like to invest in smart ulip, in this regard my question is how much is the expected return at the end of seven years with an investment of Rs. 1.5 lac through three years. Please mention the higher as well as lower side.
Hi
You will get atleast maximum of 8 lakh and minimum of 5laks. So if U want to invest in SBI smart ulip U can invest without any hesitation.
Hi All
I think in all aspect SBI LIFE smart ulip is better than all other ulip plan in the market because it is a part of SBI Bank and SBI is a Government Bank. So in compare to private competitor it is better than all. If U see the NAV of SBI smart ulip from start date to till date it is giving 40% returns but in Birla or other return is 5% to 10%.
Dear All,
I want to insvest 1.5lac for max 10 year interms of Fixed deposite or in insurance like SBI ULIP.Kindly suggest me which will be better for me.
Hi,
Am thinking of doing investment with SBI ULIP plan. Can you please let me know what are cons if we surrender after 5 years & benefits till if we keep till maturity (10 years).
Hey, Thanks for your advise & analysis on the SBI ULIPS plan . I think that’s beneficiary for all.
SBI Life SMART ULIP a nightmare of charges
Dear Friends,
PLease dnt get caught with the catchy line of SMART ULIP from SBI, please see the Benefit Illustration.
Just to give you a snapshot considering we go for a 50000 premium 5 year plan for a male of 30 years and you will realise that u spend a whopping 11.5% only against charges such as Policy Administration, premium allocation, sum assured and mortality other than the fund management charge (which is also quite high aprroximately 11.5 % again at a conservative interest rate of 6%) so u actually end up spending 55000 – 57000 only against charges in your 10 year term.
Now for all those investors who want to invest or have invested for the purposes of getting tax free returns by 10(10 D), u have already lost aprrox 22% into charges in your ten year term and your yield thereby decreases….suggest to put directly into Top performing Mutual funds and in Ten years you will get much better yields for the same investment even after 30% tax incase you have to pay over your returns.
Hi mohan & all,
Great work of ulip done.this is the time of advertisement,everyone come with sugar coated talks but in real sense,very few people says truth. Thanks for preventing me from falls investment.
now give me few hints for good mutual funds who can give better return from bank fd of 5 years with moderate risk.
Pallav
Dear mohan
great work by you.I am looking out to invest Rs.1 lakh for tax benefit this financial year.I do not have such a great knowledge about Mutual funds or insurance.I was looking upom SBI smart ULIP,but for the charges i guess its not so good.Could you please suggest me as to what are the other avenues where we can invest and gain good returns.
thanks
sowmini
Dear All,
Unit Linked Insurance Plans ( ULIPs) are part of some of the biggest con job/ripp-off/conspiracy in the Indian Financial Services industry. You straight away lose 15 to 20% of your investment returns from day one due to high administration/servicing charges. But ULIPs are still successful solely because its beneficial to the insurance company and the insurance agent. Every agent is aware of this fact but he has to sell it because its his/her bread and butter.
So, if anyone wants to invest plus get insurance cover, i strongly suggest that the best option is to buy any insurance company’s plain vanilla Endownment or Term Insurance Plan in order to mitigate your life risk and then separately invest in a good diversified equity
Mutual Fund which has historically( over 1,3 and 5 years) given good returns. !
true.
wellsaid, as long as promoters, distributors,sales dept. , get their very high salaries plus incentives these very highly front loaded ULIPS are promoted by using all sort of false propogonda.
stay away from ulips take TERM plan which is very simple to understand with low premiums.
thanks
sir,
wellsaid !
keep the good work gooing.
thanks for this service.
Hi all,
I am with SBI Life and i just want to clarify the nuances of insurance and investment. First of all, insurance is for the sake of love we extend to our family and to the tune of our liabilities whereas investment is to make grow our investment with adequate safety. Everyone knows what happened to our mutual fund and equity market last year and how many were wiped out. Your investment should be in safe hands and you must get back your investment with assurance at the end of the term.
SBI was known to born child which doesn’t know how to write or read. Its trust runs to 205 years of indian economy. Our country grown with two majors who outscored everybody in their fields. 1. SBI 2. LIC.
Now SBI is matching its performance with insurance major LIC and really performing well with ULIP products. SBILife’s cost is less compared with any insurer and we are very transparent. every quality product owes a cost and why your head on cost? It is controlled by IRDA and what you are investing is Rs.1.5 lakhs which will be roughly Rs.6 lakhs at the end of 10 years assuming you bought 6000 units in 3 years and its highest NAV will be Rs.100 in 7 years. Your Maturity is guaranteed. What else you want from your investment along with risk cover.
Cheers.
Sundaram.
Excellent I am also SBI Life advisor and we must keep visiting blogs
hi,
I have invested 80,000/- PY on smart ulip when it was launched in Mar 2009 for 3 yrs term. what would be the return to me considering the highest value nav being 15.4 last year for the same.
pls inform how to cal the returns for these.
thanks
Okey let me wait and see the result after 3 years
Dear Aswin, Insurance is meant for people who earn less and not for the rich. We koow the impact of equity market last year and how many crores lost. Insurance is an universally accepted concept and it won’t care for your poor comments. I know many families who lost their bread winner and compensated well with insurance. We are not begging for insurance and be serious in your comments.
Thanks,
Sundaram.
Dear Mr Sundaram,
Maybe I was sounding way too aggressive with my comment, I am totally for insurance. Every earning person should avail the benefits of life insurance, albeit solely for life risk mitigation. Insurance is a simple yet fabulous product; SBI is at the forefront now…. but I shall NEVER encourage anyone to invest in ULIP until insurance companies stop charging exorbitantly high admin/service fee; majority of ULIP investors are unaware of these charges, hence the perennial questions and accusations of mis- selling are raised against the financial services Companies in the insurance industry
you can see charges in ulip but not in traditional endoment product actually with compair to traditional products ulips are far better in traditional products fro 1st two years there is 100% charge zero surrender value
Hi Mohan, I am planning to invest 1 lac , Please let me know which one is the best plan to invest for 3 years.
Rajesh, there is no ready made plan that suits everyone. It depends on the risk factors you are willing to take and the kind of returns you expect. I would suggest you to read this article called ‘Saving for Future Financial Goals‘. This might help you to plan accordingly.
Hi !!
I have a ulip account.
I want to know the details about my account.
How can I get information about my account through online?
please tell me.
Hi Suchit, You can go to their site and find more details here.
Namaste sir,
I have a smart ulip policy.
I want to know the details about my account.
My policy has been dispatched from your part on 15/09/09 but till now I have not
received this. In this regard I have made a complaint and my complaint no is 461240.
Kindly inform the current status.
How can I get information about my account through online?
Thanking you in anticipation. Shrikrishna Singh
Hi Shrikrishna, To know your policy details, please visit their site – http://bit.ly...../sbiulip . Please follow that link to know the UNIT values for SBI Life – Smart ULIP Plan options including Flexi Protect fund and Money Market Fund. This is not an official site for SBI ULIPs, instead this blog is my personal site!.
present NAV of sbi smart ulip
Yes… see the previous comment and follow the link to know the present NAV of SBI smart ULIP
I am in this insurance field for the 23 years. As per the Indian mentality , they should get some benefit out of the premium paid to insurance Company. When we are giving our Quotations , use to give plain Term Assurance product, Endowment with term Assurance product, Plain endowment product. only 1 % of the public is choosing term Assurance product. 5to 10% of the people only choosing Double Cover & triple cover policy( Endowment with term rider). Rest use to choose endowment products.
Now a days the people use to choose the ULIP products ( without knowing ULIP concept) because of the terms – you can pay just 3 years & you can withdraw.
When the market is Down we use to advice the policy holders to top up & to take new policies they had fear of Market & they have not invested their money. When the Market is Up , after seeing the present NAV & past NAV – (On Assumption the same growth rate will be there in the future) people use to invest in wrong time.
Mutual Fund or Ulip one should Invest when the Market is Low & you have to book profit when the Market is Up.
Don’t beleive that, you will get 20% or 30 % growth every year.
Now days the Bread & butter for the Insurance companies are ULIP products. There is no expenses & no commitment for insurance Co. Every thing is meet out by the Policy Holder. For Insurance Cos They need not announce any Bonus, Surcharge for insurance prem is paid by the policy holders (In other products Some Cos are paying on behalf of the Policy Holders). Commission is born by the policy holders (Sot hat only LIC fixed less commission to its Agents- Pvt cos are giving 20/25/40% to its ULIP products LIC is giving only 10% – as per the information we got). So better go for term assurance products or go for the ULIP When the Market is at its Bottom that also as Single premium- the charges are very low in single premium policies.
My first question is: How much is the expected return at the end of seven years with an investment of Rs. 3.0 lac through three years. Please mention the higher as well as lower side.
Second question is: What is the other product compareable in the line of this product?
Hi Subrat, there is no straight answer for your question. It depends on the fund performance which is linked with your policy.
Hi Everyone,
I want to invest in SBI ULIP plan. But I have some doubt:
1. If I invest 1.5lacks in 3 year on the NAV 10.00 and at the matuarity time NAV go to 9.00 then how much money I will get through this plan.
2. what is the risk factor of this plan.
Please me more detail about this ULIP plan. and SBI SIP plans also.
Hi, I found ur details too late, ok, nice job
Oh… wish you had seen this before! Anyways.. from next onwards you know what to look for before buying any ULIP!
I am confused.. should I go with this or do I have an option to withdraw in the middle? I seem to have done a mistake by getting into this smart ULIP business altogether.
Chintan, it depends on the ULIP you have chosen. Go through the documents to find out what provision your ULIP has on your query.
My financial advisor discourages to go for ULIP,instead he advised me to go for term insurance.Can anyone please give me a better idea on this.
Hi Ganesh, He is absolutely right as far as my knowledge goes. Never combine insurance with investment. Seperate them out to reap the best benefit out of every rupee you invest.
Hi Ganesh
A Best option for your benefit is going or stepping into Reliance Insurance Plans. The best plans to make us pleasant at present in all types.
Hai, I want to know about this plan ,I mean with guarenteed amount that is If I Pay 150000 and what will be the metured amount on which year. please kindly send reply.
Hai, I want to know about this plan, I mean with guaranteed amount that is If I Pay 150000 and what will be the metured amount on which year. please kindly send reply.
Hi, thank you for the info on smart ulip. I am going to invest on Smart ulip but after seeing your post , now i am in confusion of where to invest. Can you suggest any best plans without much charges as mentioned above and get more benefits.???? What about other plans of SBI — like UNIT PLUS II ??
Awaiting for your suggestions.
Hi Kumar, thanks and welcome here! Well, I am not a finance adviser to provide some suggestions. I suggest you plan your investments and then go ahead with your investment options. I haven’t looked into SBI Unit plus 2 yet. Will provide a review when I get a chance to go through it.
You can keep yourself updated with this blog by subscribing to email notification. If you haven’t subscribed yet, please feel free to do so by clicking here
UNit plus II is the best plan if you use switching and topup facility the charges are very less if you are going to pay for 20 years or more and go for 50times life cover it is cheaper tan term insurance
for the first time i am falling into income tax slab.i have to invest 50.000 to save my tax.can anyone advice me which is better NSC,KVP,BANK FIXED DEPOSITS,SBI LIFE SMART ULIP,SBI LIFE UNIT PLUS II,LIC or what pls suggest me
Hi Rajrrv
The best option at present is Reliance Insurance Policies, the wide plan which offers you to a grand success.
you sound like a reliance insurance agent.. don’t you?
Hi Mohan,
This is of course a general suggession.
wait for smart ulip II to be launched by january unit plus to shall be withdrawan from market by 23 dec now unit plus 3 shall come
Hello everybody, Aegon Religare has launched a term insurance policy called ‘iTerm‘. This seem to be the cheapest insurance policy in the market. I have written a separate article with all the details about this plan. Check out the plan here – http://mohanb.....lan-review
I wish to start SBI SMART ULIP plan….& I have following questions…
1) Will their annual process charge of currently 15% will increase? Please tell how much LIC, and other banks are taking this processing fee.? Do they really manage our funds ? If YES – How ??
2) Will their 5 % charges likely to increase after 1st year?
3) How much NAV you think will increase in next 3 years ? is there any risk investing ?
4) If I invisted 60,000.00 pear year, will I be getting 100% tax benefit (i.e. on complete 60,000.00) ? Please confirm.
it shall not increase it goes on decreasing its current nav is rs 15.40 date of launch is 8th march 2009 i.e. within six monts it has grown upto 54% against which you have to pay 15% One lac has become almost 134000 in six monts and this shall not reduce as highest nav is commitment of sbi life hurry up porduct shall not be available after 23/12/2009 and afterwords you gave to pay 5 year premium there is no loss by charge you are getting service
Hi, can you send me some more details about Smart Ulip plan? Like if i invest Rs. 150000 in three years, what will be the maturity period and how much will be the sum assured….
It isn’t that easy to predict what would be the sum assured. It depends on various factors including the performance of ULIP as well as the various charges levied towards administering your account. Get in touch with SBI Life customer care to get more details.
Sum assured is 5 times of annual premium and on deth you get higher of Sum assured or fund value in horozon II ulip from sbi life you ger sum assured plus fund value
Do you really want to invest it is closing on 23/12/2009 < MODERATED - personal info not allowed >
hi Mohan
Thanks for providing such useful information.
can you please tell me investment plans for short term period ?
Hi Mohan,
I had invested 50K in SBI Life Smart ULIP and my advisor (who is my friend) told me that it’s for single time payment only. But I got a letter from SBI Life to pay the next year premium for 50K. I asked my advisor about this and he told, no need to pay the next premiums and the policy won’t be elapsed also. He told they generally select yearly premium payment option while applying, to get high commissions. Is it true? Kindly let me know the facts on this. If I don’t pay the premium, will the policy be elapsed after the due date?
If he had told you that it is single premium lodge a written complain against him with sbi life branch and get your aknowledgement signed also mail to sbi life customer care and still i think you are fooling because smart ulip has been launched on 08/03/2009 yearly renewal premium for very first policy issued has yet to come it shall come only after 08/03/2010
SMART ULIP is best product keep on investing or asign the policy to some body else and let him pay next premiums
hi Girish,
Thanks for the update. I had invested in some other ULIP also earlier apart from Smart ULIP and got notice for that one to pay the next premium. Its is the same case with that policy also, he told no need to pay the next premiums. He told if I don’t pay next premiums after due date, the policy will be treated as single term payment policy and it won’t be lapsed. Could you pls tell me whether the policy lapse if I don’t pay the next premiums after due date?
what ever units you have got is yours after lapse of policy no mortality charges shall apply after three years surrender the policy to check you fund value sms NEWREG<>policy no<>birthdate to 56161 after that sms FV<>Policy No. to 56161 this is applicable to all sbi life ulips you shallloose your nav guarenty feature but you can check nav and withdraw your money afte five years
Sir i am planning to invest in market plus with 50000 one time. After ten years how much would the return be? please let me know… already i have invested in market plus worth 50000 in 2007
Sir i am planning to invest in SBI life Smart ULIP fund with 100000 one time. After 5 years how much would the return be? please let me know.
1.If i invest Rs.80000 yearly(premium) how much i can except at the tiume of maturity.
Hi Mohan,
Looking at the current NAV of 15.67, is it benefecial to invest 50,000*3=1,50,000/- Rs in the SBI Life ULIP plan? Whether PPF will be better option for me? Kindly reply.
Dear Sir,
In the SBI NAV Gurantee, is it correct that the funds will be tranferred to Money /Debt Fund twice in a month at the stipulated date. The highest of NAV of these funds shall be given ? Please comment
Hi All, I have a big doubt. Am planning to invest 1.5 lacs in coming 3 yrs. I need to know ICICI RICH FUND is better or SBI Smart ULIP is better or # ICICI Return Guarantee Fund is better? Kindly reply, am waiting for ur reply.
dear all,
welcome! thanks for this service.
i am very confused to see some of them promoting ulips and particularly from S B I.
ask any policy holder of unit horizon ,paying premiums for the last 4 years, is still in loss.
if any one of you is happy with ulip of any company,
post your policy no/company name, so that some one can VERIFY the facts.
thanks
Economic recession is the responsible culprit. But this is just a passing phase and in the Long run, the investor would be the winner. Just keep a horizon of 7-10 years. Dont panik and exit early.
Unfortunately for those who invested in ULIPs were not educated about the various fund options. Remember a typical rule of switchovers amongst various funds. (Percentages might vary from Co to Co.). When Markets are moving in positive trend, invest in maximum Equity option and when in negative trend like 2008, one must invest/switch in debt based funds. In case you are skeptical or not market savvy then the best option is balancer fund. Unlike my peers, I actually earned good money before recession,during recession and even now at the fag end of recession. Reason – When Stock Mkts were drifting towards peak, I opted for maximum equity fund option, When our began to react to recession, I switched to balancer fund and when I realized that mkts wont recover soon. I parked my funds to maximum debt option. Typically, I earned over 50% pa before recession and 18% pa during recession.
Its our hard earned money that we are investing and advisor gets good commission on our investments. So I ensure that my advisor and the company is on the run throughout.
Mr. Srinivas, Yes., whoever invested in to our ULIP ie LIC as single investment they got double in 4yrs in this drastic market down period also. < personal info moderated >
Regards
Very Useful discussion on SBI life Smart Ulip.
Just want to add one more point. Just incase of poliy holders death in frist few years assuming your investment is 50K the actual value will be 2.5K. Can any mutual fund match this? This insurance coverage you are getting without going for medical tests. then why worry about charges. Everything costs something in this world.
For any guaranteed returns investment or insurance prodcuts in market more than 8% returns you should wait for atleast 5 years ( thats why the NSC or LIC guranteed plans come with 5 year lockin period.). form Jan 2010 onwards all ULIPS will come with 5 year lockin period as IRDA has made it mandatory.
SBI Smart Ulip is good ULIP in market with Guranteed returns more than any other investments ,if you stay invested for 10 years with protection of invested amount. Happy investing.
< personal info moderated >
hi,
this is one of the good invetment with guranteed return in ths decade
The paradox of ULIPs
By Dhirendra Kumar
A couple of days ago there were some announcements from the Life Insurance Council, a lobbying body formed by life insurance companies. Broadly, these announcements appeared to say two things. One, that the terminology of Unit-Linked Insurance Plans (ULIPs) would be made uniform. And two, insurance companies would refuse to underwrite insurance-linked schemes issued by mutual fund companies.
Behind both these issues is a struggle that is going on between life insurance companies and mutual funds. Here’s what this fight is all about. Mutual funds and life insurance are two distinct products, one being intended as a savings vehicle and the other a safety net. However, over the last few years, this distinction has become blurred. Today, if one looks at the actual money that is flowing in, then the life insurance companies are also in the business of running mutual funds. These mutual funds are called Unit-linked Insurance Plans (ULIPs). ULIPs have a mixture of the characteristics of both insurance and mutual funds. Crucially, the mutual fund aspect of ULIPs is regulated by the government under a very different set of rules compared to real mutual funds. From the investors’ point of view (which is obviously the most important point of view), the biggest difference lies in how much of his money is actually used for his insurance and his savings and how much is taken away to pay the commissions to agents and the expenses of the insurance company. The second big, related difference is the quality of the information he is given about his investments.
Mutual funds deduct no more than 2.5% of the agent’s commission. And this deduction is 0% (by law) if investors don’t use an agent and go directly to a fund company. In ULIPs, the agents’ commission varies but in the first year, it could be anywhere between 25% and in some cases, 75%. There are a lot of things in finance that are difficult to understand but the difference between paying 0% commission and 75% commission is not one of those. Even the difference between 2.5% and 25% is pretty easy to understand.
Next is the issue of transparency. One of the most interesting is the vast difference between the meaning of ‘Net Asset Value’ (NAV) between ULIPs and mutual funds. In a mutual fund, the announced NAV is net of all expenses and charges that the fund company deducts. If your investments were worth Rs 1 lakh when a fund’s NAV is Rs 22, then it will be worth Rs 2 lakh when the fund’s NAVis Rs 44. That’s it. The arithmetic of insurance companies is different. ULIP’s NAVs are effectively pre-deduction. The NAV may double, but your investments won’t double because the insurance company will reduce the number of units you hold to pay for expenses, commissions, etc. This means that the announced NAV has no clear and transparent relation to what the unit holders are actually earning.
However, ULIPs are phenomenally successful. News reports say that last year, a total of Rs 55,000 crore was invested (if invested is the right word) in ULIPs. In the same period, around Rs 16,000 crore was invested in mutual funds. We are often told by the insurance industry that this is because ULIPs are a superior product. That’s complete rubbish. ULIPs are successful because the ultra-high commissions and charges make insurance agents far more aggressive salesmen than those of any other financial products. These charges also enable insurance companies to spend far more on advertising. All of which is the unit holders’ money. The net result of high-pressure sales is that savings that would otherwise have ended up in mutual funds, bank FDs, PPF, post office and many other asset types is ending up in ULIPs, where a good proportion is diverted to pay commissions.
The direction that the Indian insurance industry has taken in the last few years is a huge regulatory failure on the part of the government. This industry was opened up to foreign capital and provided with a relatively lenient regulatory framework so that it could bring insurance to India’s under-insured masses. Instead, it has ended up focusing its energies (and capital) on selling expensive and opaque mutual funds that are dressed up as insurance. It’s tragic that there is no move to even recognise that this problem exists. Now, even higher foreign ownership is on its way, supposedly because more capital is needed to ULIP the under-ULIPed masses even harder.
It simply isn’t in anyone’s interest to bring up these issues. Most large mutual fund companies aren’t bothered either because they are part of financial conglomerates that have flourishing insurance businesses.
It’s up to you, as an investor, to understand the issues and do what you think is in your best interest.
—The author is CEO, Value Research
hi,
I have one query…not sure if this is the forum…..what happens if despite IRDA guidelines on maintaining solvency ratios,an insurer files for bankruptcy, what will happen to the insured? As far as i understand,most of the private insurers are yet to break even with 7-8 years in operation.I heard there are guidelines which allow companies to merge,as happened with the case of ANP Sanmar and Reliance.
Although LIC has the lowest solvency ratio of all, the liquidity is pulled in from their own reserves.
SBI Life is in profit and its solvancy margines are above required thats why it got iAAA+ AAA Stable fron crisil
hi, SBI Life – Smart ULIP any closing date is there my agents says this 24th of dec 09 will be closed it is correct
hi ,
Today i went through the whole review given by many thinkers and sufferers . I repent today why i had listened to the agent sitting in the SBI chamber as a AGM and offering us to buy such a nuicense and worst plan ULIP. They didn’t disclose any type of charges and just finishes the formalities within 10 min. when i went through these above reviews then i came to know the biggest mistake i did by buying this ULIP. Friends i don’t know how many times money will multiply in 10 yrs bt at the investment time they have already deducted approx 30,000 which for all of you may be nothing but for me a high earned money.Please don’t buy , its better to pay tax then to go for such a plan.
you are wrong the charges and benefit illustration is included in proposal form you should have read it and any way it is cheap as compair to other ulips
Hi Mukesh,
Thanks for your quotes. Actuall i was planned to invest smart ulip or rich fund in icici – 1.5 lacs in coming three year. But, after saw ur quothe i have a huge doubts
Can you pls directs me where to invest these 1.5 lacs.
*** personal info moderated – please refrain from sharing emails.***
Thanks in advance to mukesh and anyone who guide me. Thanks
Hi Senthil,
Thanks for your version regarding this vision.< * MODERATED - PERSONAL INFO NOT ALLOWED * >
Thanks & Best Wishes in advance to Senthil.
hey can anyone opine which is better
sbi smart ulip or lic market plus1 ????
Hi Aneesh
SBI smart ulip is better than lic
I was advised by Mancherial SBH Branch Manager(Garimilla Branch) for the SBI Smart ULP. I immediatly paid 50000 RS. Really this is a very good Plan.
Sir, Is there any way to cancel smart ulip application once submitted, because the agent did not explain the charges before,
so any ways to do, i applied on 17/12/09
Regards Benny
Yes, but you need to run to the bank for this. You can get it canceled with in 15 Days of purchase..
One way is if you have given the cheque withdraw money from your account and let the cheque get dishonored or return the policy within 15 days of arrival
Dear Mr.Mohan
I have applied for smartulip from sbilife, If i cancel the policy before 15 days , any deduction will be there? or what will happend if the period of the policy is 5 instead of 3 years , becase i applied for 3 year, but the illustration page shows 5 , and if i dont pay after 3 what will happend ?
please answer
benny mathew
Hi Mohan,
i am planning to buy a ULIP from Birla sunlife either Dream plan or classic life premier. PLease help me out which one to choose. have gone thru the broachure and awre of the highlights but unable to decide. Please help
Expecting your reply soon..please
Thank you
please advice me if i want to go for max life insu. to oblige one of my known and forcing me to do some thing, I can/ want to pay 10/20k thru single premium for 3 yrs only. which product of max is good
max newyork life policy details contact its web site go through details on web site do not believe agent
Hi,
If i applied today in SBI smart ulip the NAV allocation will be Rs.15.42 or Rs10.00 only pls clarify. . . . .
it is the always current nav 10 rs was launching nav actually you get uits on 8th or 23rd of the month what ever comes first after issuance of policy
Hi,
I would like to invest 1.5l in 3 years.
could you pls tell me the amount I can expect after 7 years and how maturity value would be calculated.
Thanks in Advance
what will happend if the agent made the paying term 5 instead of 3 in smart ulip policy..
will i loose any money.
You wont be penalised for not paying after 3 years. In case you pay premium for 3 years and stop premium payment, then charges like Fund management, Mortality and Admin charges would be deducted from your account value. The policy will continue till your account value supports these charges. But then what is the use of such policy. I recommend that you somehow manage to pay for minimum 7-10 yrs and then see the wonderful benefits of any ULIP.
By the way, investing in ULIPs have become more attractive since Jan 1st 2010.
Mutual Funds or ULIPs, whatever be the mode of investment, we are heading towards a more and much better mode of transperancy.
Whatever, be the explanation given by the advisor, pl go through the website of the company for actual product and you always have Mohan who manages his website so intelligently and effectively. And what more, you have Dhirendra Kumar joining us who can always guide us appropriately.
By the way, Once again I reiterate the fact that ULIPs or Mutual Funds are Market driven and hence if any advisor is giving vague return figures then pl refrain from buying from them. IRDA restricts advisors from giving illustrations of more than 6 and 10% returns…It is a universal experience that ULIPs have given much better returns if we pay for more number of years but nobody can commit any figure about returns.
PENALISE THE Advisors:
General Indian Trend observed(which is absolutely incorrect as per me) is that we give basic info to the advisor and then just sign the form plus other reqd docs.
Better way is to read the form (Which are not so lengthy as they used to be earlier), give correct info in the form and only then sign. only then such mistakes wont happen.
If we find any discrepancy in the form which is done by the advisor, then withdraw the application, complain against the advisor. Reapply with some other agent. This would teach a lesson to the advisor so much so that other customers would benefit out of it.
Companies send the photocopies of the form signed by us. So go through the same after the policy is issued and immediately point out the mistakes to the company to get it rectified. Ensure that this is done in 15 days of receipt of the policy document.
As I always say, ITs our hard earned money, So ensure that Advisors and Companies are on the run throughout.
hello all, lot of you have been trying to save some money in the form of tax by investing in some plans. Don’t get carried away with that intention. Read my latest two articles on tax planning and I am sure it will help you to plan better. Don’t simply go with the intent of saving tax… think of what is correct and invest smartly.
Hi,
A Well maintained and informative website! Congrats!!!
Regarding SBI Smart ULIP only thing I can say is it is giving you the highest registered NAV, Charges if you compare with other policy then they are also less.
As far as Insurance cover is concerned it is very minimal, but return vise it has already registered 60% growth.. And most importantly the highest NAV is guaranteed so as per my view it is worth a buy.
But honestly speaking I became a fan of your site:-)
hello!
dear all,
WELCOME TO THE BOARD.kindly remember life insurance is to protect the economic value of the policy holder,incase of any UNTIMELY death, ACCIDENT(disability),his dependents like wife,child,parents receive compensation.
kindly donot treat this option as wealth creation.
for income tax savings take E L S S.
take one family (2 adultsplus 2 children) health policy from any psu non life (general) company.
unit linked polices are not suitable for all,only for term above 10 years with maxium sum assurad with riderslike ADB,W O P etc….
A PURE TERM PLAN WITH GOOD FRONT LINE STOCKS will do all good work.
all good luck !
I have been in this industry since the advent of private life insurance companies and I have tried to convince almost everybody that I ve come across in these years regarding opting for term product. But barring a few(would not be more than 10-20 people) none of them seem to convinced about buying a product which does not give something back in return. I think like minded people like us and probably an awareness creation for longer duration would serve the purpose.
I agree with purchase of term plan but somehow am not convinced on shares investment if one who does not have knowledge of share market. They should leave this job to the fund managers of ULIPs or Mutual Funds.
Admin charges have got reduced from Jan 10 and there are newer guidelines regarding ULIPs now, so ULIPs cant be costly henceforth. Target should be adequate life cover in form of term cover+ULIP with min cover or Mutual Fund investment.
Hi All,
I am new to this form of investments and had recently taken SBI SMART ULIP by paying a premium of 50000(and have to pay 1 lakh for the next 2 years) and am assured that i will get a minimum sum of 2,50,00 at end of 5 years. My question to all masters of the trade is — “Is there a chance that i end up losing a part or all of my invested money i.e, 1,50,000(in 3 years), if the market goes bad or worst or in any other scenario.”? Since i am new to this form of investment, i am curious to know if atleast the amount i invest is safe.
Hi Kumar,
In a scenario where u have invested 1,50, 000, normally 20% of your investment will gets deducted in term of charges(initial allocation charge + other periodic charges).
This will left you with Rs. 1,20,000.
1) Suppose you have invested at an average of Rs. 13(1st yr=12, 2nd=13, 4th=14) per unit over the three years term then you would get 9230.76 units.
In the same time you would gets surity of Rs 14 per unit as your HIGHEST NAV.
This will give you only Rs 1,29,230.64 compared to Rs 1,50,000.
To break even you need atleast Rs. 17 as your unit price.
2)As far as your question of loosing entire amount. It is unlikely as they guarantee you atleast the NAV which you are investing. So NAV going below invested NAV will not leads to investment getting NIL.
Thanks for the information Bhargav. So if NAV is going to be less than 17 before i claim, then i am bound to loose money, right?
Dear Sir,
Kindly advise, I have lost my SBI LIFE (SMART ULIP) policy documents which I received by Post, what is the way I can get the documents re-issued and what is the procedure involved.
Regards,
Shakeel Ahmed
Shakeel, get in touch with SBI Life customer care. They should be able to assist you better.
Can someone comment on the performance of SBI Smart ULIP while comparing this with other ULIPs in the market? How is the returns and the claim settlement record by SBI?
Reshma, could you be more specific when you ask for performance? What parameters are you looking at you evaluate this ULIP?
hi SBI’s policy management is not good, after the policy was bought, SBI officer is not giving proper response to the customer queries.
Sorry to hear that. Would you mind sharing more info?
Dear Sir,
My first question is: How much is the expected return at the end of seven years with an investment of Rs. 1.5 lac through three years. Please mention the higher as well as lower side.Can I withdraw this money after 3 years? as my agent told me that i can.
Dear Sir,
Have there been any reduction or changes in the service charges and other charges charged by SBI for smart ULIP. i would like to invest in this please guide me.
Sri.
I don’t have any updates on SBI reducing various charges on its Smart ULIP plan. Where did you get that information from?
one of my relatives underwent heart surgery few months back and is currently on the recovery mode. When discussing with him abut his insurance policies, i found that his total Sum assured is quite less and will not be enough for his family in case of any eventualities. He is the sole bread winner for his family,so, i am wondering whether there are any insurance policies or term policies that he can avail. I believe that he cannot take any insurance policies because of his current state, and would like you to let me know if you know some policies that he can take.
Dheena, I think too many things are being mixed up here. Let me sort out the problem here.
1. For illness related covers, go for health insurance. This is a must, no matter what age category you belong to.
2. For Life covers, dont’ mix up insurance with other modes like investment or health. As such linked policies will always yield lower benefits when combined. Always opt for separate instruments for investment and insurance.
Life insurance is to help family in the absence of primary earning member/s.
Also, now that the importance of insurance is realised, would it not be prudent to get the other members insured. Worst scenario – In case something unfortunate happens to him, who would be the next primary earning member, what about his or her insurance.
Term Insurance plans are out of question for your relative. Frankly speaking I have underwritten few policies in the past wherein the proposed insured have had some cardiac ailments. Let me tell the acceptance ratio is negligible in such cases and that too with huge extra premium. In case you are an agent, then you can take his complete past medical reports, show to them to the underwriters and then get seek an approval from them to log in the case. Directly, dont pick up the case and log in. Rare chance of acceptance but still give it a try and ULIPs with minimum cover option are the only product to be tried. Dont even think of enhancing the cover. Ofcourse, fresh medicals would also be required incase the company allows to log in the proposal.
Once the casualty has occured, then a person with less insurance cover should save more and more for his family.Here he can invest in zero death benefit products or mutual funds.
Thanks for your clarification, I see what you are saying. I will ask his wife to take a term or life insurance on her, so, that things are covered in case something happens to her. However she is a house wife, so, will there be any specific limit for term insurance cover?
Term insurance are not designed for homemakers. Some companies might allow minimal cover of 3-5 lacs for homemakers without husbands cover. Also, the requirement for term insurance is apt at early and mid ages.
Term products are designed for the bread winners i.e. whose unfortunate death would bring a financial lacuna in the family. So, if something happens to a homemaker, would there be a financial crisis in the family. The answer is No.
One more point in which term product cannot be considered is Unearned income like interest amounts etc.
Basically,this is a typical family which needs proper financial need based analysis. The existing savings must be split into immediate, mid term and long term needs. They should be invested accordingly. If at all, the homemaker wants an insurance cover then she will have to opt for a ULIP which will suffice her investment as well as minimal insurance needs.
My serious recommendation would be to seek a proper planners help.
Term insurance are not designed for homemakers. Some companies might allow minimal cover of 3-5 lacs for homemakers without husbands cover. Also, the requirement for term insurance is apt at early and mid ages.
It depends on the underwriting guidelines of companies. A strong case would have to projected alongwith the application giving the actual purpose of proposal.
Term products are designed for the bread winners i.e. whose unfortunate death would bring a financial lacuna in the family. So, if something happens to a homemaker, would there be a financial crisis in the family. The answer is No.
One more point in which term product cannot be considered is Unearned income like interest amounts etc.
Basically,this is a typical family which needs proper financial need based analysis. The existing savings must be split into immediate, mid term and long term needs. They should be invested accordingly. If at all, the homemaker wants an insurance cover then she will have to opt for a ULIP which will suffice her investment as well as minimal insurance needs.
My serious recommendation would be to seek a proper planners help.
Hi,
I had filled the proposal form and paid DD for SBI Smart ULIP II on 7th Jan 2010 in SBI Bank and the Officer has assured the NAV 10 and will be resistered on 8th Jan 2010 . but now it has been resistered on 25 th Jan 2010 at NAV 10.37,
May i Know how much day will required for resister? why it has been delayed?
smart ulip has 2 funds money market and flexi protect , inetially your money is invested in money market fund and you get nav of that funs on issuance date later the momey is shifted to flexi protect fund on 8th or 23rd which ever comes first after policy issue date and if your policy is issued on 23 or 8th then your money is directly invested to flrxi protect fund which offfers higest nav assurance current nav is 9.87 and highest is 10.81
policy is sold by sales team but you are appplying for policy it is issued after a process called undewriting ,which decides whether to issue policy or not once company accepts your life risk then policy is issued and in ULIPS you get closing nav of policy issue date in smart ulip it has different syatem of nav
Not sure if you have posted this query for somebody specific. However, I will try to resolve your query though at this stage I dont know much about the facts.
NAV setting date is not dependent on the date of payment clearance, but it is dependent on policy issuance.
Generally, the NAV Date given to you is the date of policy issuance depending on the cut off time that the company sets in.
Mohan
You have been constantly saying dont mix up your investment and insurance. Among investment options what is it that you would recommend ? Also do you think that since market is fairly at a bottom this maybe the best time to get into it ?
Hi Chandrasekhar,
In reply to your comment, another reader by name CH Srinivas wrote a mail to me as below:
“life insurance means risk or untimely death due to accident or by a dicease.
investments are for the fear of living too long.”
I do agree with him to a large extent. But there are many decisive factors like age, financial goals etc., which affect an individuals planning. There are many articles regarding financial planning on this blog which will answer your question. Please go through them.
Hi All, those of you who have been asking for similar products compared to SBI’s Smart ULIP, here is a list of 2 such products and complete details available on my blog:
1. LIC Wealth Plus with Guaranteed NAV
2. Bajaj Allianz Shield Plus
mohan
on one hand we say ulips charge high , but if u compare even mutual funds charge nearly 2.5% of our fund value as charges every year and hey friend since this is not shown in our daily nav, most of the people think that mutual funds do not charge even one paise per year , on an investment of 1,00,000 mutual fund house charges about 2500 / year as their charges and suppose next year the fund value is 120000 then i pay about 3000 rs , is this not right, then how come u say that mutual funds are cheaper ,yes only in the first year the ulip charges are higher but if you average out the cost during 10 years then mutual funds are more costlier
krishnan
Krishnan, your points are valid to certain extent. The very fact that the returns through mutual funds outperform ULIPs in most of the cases. Though the charges for fund management and administration are comparable, the returns are not!
Which is the best ulip plan. If I want to invest money for invement purpose only please inform the best mutual fund
If investment is the sole purpose and nothing else, then I can tell you how i started my investment in equities. Maybe you can try investing 20% of your investment in equities directly: My records state that SBI Magnum and Reliance Growth are two of very good MF’s. I checked out where they invest our money, the list is given in the form. I chose 10 top performing shares in terms of name & industry performance. Invested in them and wow, I made 25% more than my MF portfolio manager did for me.
For ULIP’s one needs to be quite inquisitive to do all the research or hand over job to an analyst/planner. Every company advisor/agent will run after you for hours the moment you say you want to invest only for investment purposes. Be careful. Read other articles published by Mohan and his Guests.
Personal Advise: Invest When and If Nifty touches 4400/4500 and withdraw your profits after every 20-30% returns. This is just an indicator and one needs to be bit market savy to understand this. And last but not the least: Whats the fun in taking good returns without a bit of excitement and RISK.
Hi Mohan,
I have found your website invaluable in my recent quest for insurance. I started looking for term and now am confused whether to go for ULIP. Yesterday, the HDFC Standard Life salesperson came over and he told me about a ULIP where I can take 40 times annual premium as cover, i.e. if I put in 60K a year I get cover for 24L. Plus it has CI and ADD rider. The mortality charge is lower than term cover right now, but it goes up with age. I am not sure if they will reduce the cover based on how much the fund value is. I mean if the fund value is 20L when I am 50, does it mean they will only insure 4L?
Today I looked at Bajaj iGain also and I found that interesting as well. Am I on the right track? I am 40 and I need insurance of 24L at least. I checked at term and it would cost me around 10K and it won’t increase.
I know how these insurance guys hard-sell ULIPs (In fact I didn’t hear from the ICICI guy after I told him clearly that I wanted Term). But isn’t the section 10 10(D) benefit the best reason to get ULIPs? I mean with stocks I get hit by capital gains and income tax if I sell, but with ULIPs isn’t all the money received on surrender fully tax-free?
Thanks!
Check out the ULIPs where you can take even cover upto 80 times of cover. If tax saving is the only motive then why not invest in mediclaim, term plan and ELSS. If you buy equities and hold for 365 days and after 365 days sell then long term capital gains would be applicable. As on date, LTG is taxfree.
The best reason to buy ULIP is to participate in Stock Market without having to manage funds on your own plus purchase a life cover. Section 10 10 D or 80 C is just one tool which government has opted to promote and encourage life insurance awareness. As of now, Maturity amount and not surrender amount is tax free. Also, for Section 10 10 D one has to be clinically hale and hearty without any existing ailments like Cardiac or Respiratory diseases or disorders like Diabetes etc.
It will difficult to decide if you keep on talking to n number of agents. There are 23 companies and how many companies would you keep hopping. Infact these agents would nothing but confuse you.
Lots of pros and cons. Better seek profesional help than that of individual agent.
CORRECTION: PLEASE READ “for CI Rider” instead of “Also, for Section 10 10 D one has to be clinically hale and hearty without any existing ailments like Cardiac or Respiratory diseases or disorders like Diabetes etc.
So the correct statement would be: Also, for CI Rider one has to be clinically hale and hearty without any existing ailments like Cardiac or Respiratory diseases or disorders like Diabetes etc.
Wow.. So much of information in this article as well as in comments. You are writing great about financial products Mohan. I read the latest articles on finance & tax planning, simply a cool place for so much of information! Thank you is all I can say for putting it across all in one place.
Glad you liked it
Thanks!
Thanks Jayant for your reply. I didn’t know I will have to pay tax on surrender.
Can you tell me which ULIPs with 80 times cover? I think for 60K, 15-18L cover may be fine. I would have to drop CI since I already have diabetes.
Can you tell me if ADD is necessary? Doesn’t the basic insurance cover death in a car accident for instance?
I am leaning towards Bajaj iGain. However I wonder if the annual policy admin. fee of 1,200 which goes to close to 5K is too much. For 60K it means I start at 2% and it could be as high as 8% at the end of 25 years.
As you rightly say, I am thoroughly confused. Pls help.
ADD helps a lot as the benefits are in addition to the death benefit and a very small premium. e.g. death happens due to car accident then death benefit=sum assured plus ADD amount. so if sum assured is 20 lacs + ADD is 10 lacs then death benefit=30 lacs. I just read an article in newspaper(I have to check the courts exact reading yet) wherein High court judge has approved a claim of ADD benefit for heart failure case too coz cardiac arrests are unwarranted & occur as an accident itself. so it is always better to go for riders. CI is out of question but you can opt for mediclaim.
Regret that I cant give you product specifics as i am a professional financial advisor and my services are chargeable which you can come to know on my website.
I insist you seek financial planners consultancy. I would not mind if you can visit any other financial planner, but here is why you should appoint financial advisor just as businessmen need CA’s or other consultants:
1. The right product mix which only a professional can tell. 2. ULIPs will have their respective charges, only a financial advisor would show you ways to nullify them 3. He can save this money too if he analyses your existing products.
4. More importantly, future management of fund switches.
5. and ofcourse, tax saving.
the discussion and suggestions in this page was very informative. A beginner may get first hand information on how the ULIPs works and it is note worthy to say that it make us probe more. thank u.
however, if , a comparison of mutual fund working is also incorporated in this , it would have helped those are a bit reluctant in investing mutual funds.
madhavan.
Glad you liked it Madhavan. I will keep your suggestion in mind while writing future articles. If you liked the posts on this blog, feel free to subscribe for email notification. That will help you to stay tuned with new posts on this blog.
In Short,Can you please tell me if I need to Invest 20000/- as annual premium in ULIP, which is best in market…..Wealth plus or any other ?Please help me.
sir,
I want to know that how to process smart ulip?
Sorry, i didn’t get your question quite right. would you mind elaborating it?
Hi friends,
If you are looking for doubling your investments you should be investing in Kisan Vikas Patra wherein your investment will be doubled in 8 years and 7 months.. The other option to increase your returns is go for Post office MIS and divert the monthly interest towards Post office RD.. Doing this you can maximise your return rate.. Afterall traditional and conventional savings are THE BEST option to remain calm and composed.. I am not against money market.. I would say like this.. If you have Rs. 100 to invest, then you should be investing 80% in traditional savings and rest of 20% in modern money market..
Hi Rashmi, good you bought up the traditional risk free modes. Well, people look at other ones because they are willing to take some risk and by which they wish to make more money! I do agree with your thought on diversified portfolio with a mix bag of risk free and risk involved investment but I would suggest 60:40
Before deciding on that ratio, it is good to have a sound financial planning in place.
Dear Friends,
No comments against the policy since it is the good policy. Smart ULIP is Smart.