Today, I came across IDBI’s Life insurance plan called ‘Bondsurance‘ which is very much similar to LIC’s Jeevan Aastha. Bondsurance is a single premium plan which allows an individual to make a one-time investment and get a guaranteed amount on maturity. One can choose a maturity period of 5 or 10 years for investment under this plan. At the end of the chosen period, investor will receive a guaranteed maturity amount. You can calculate the Single premium amount based on your needs here. I did go through the details of this Bondsurance investment plan.
Listed below are the salient features.
* Single premium policy – you can decide on either of premium or maturity amount.
* Discount on single premium account if you are investing more than 1.5 lakhs.
* Tax benefit on investment premium as well as on maturity amount.
* Insurance cover is five times the premium through out the tenure.
* Premature Surrender facility available.
* No loan facility against this plan.
If you are confused on which one to go for, here is a bit of calculation to help you understand better. I am going with the good old example as on LIC’s site by considering an individual of 35 years old. All the calculations in Indian Rupees.
Provider/Plan Premium
AmountMaturity Benefit 5 years 10 years LIC’s Jeevan Aastha 48,975 ~72,500 1,00,000 IDBI’s Bondsurance 48,975 65,475 94,002
So, the major difference between these two would be:
1. Returns are higher in LIC.
2. Insurance Coverage is 5 times through out the tenure in IDBI.
Now you choose whichever suits the best for your requirement!
Disclaimer: I am neither an insurance agent nor an investments advisor. All the info provided in this article is based on my understanding of the policy details as available on the respective provider’s sites.
dnyanesh says
pl tell me best investment plan
Liji Bobby says
Hello Sir,
Need your advice.I have a daughter who is 1 year old.I was planning for a good investment plan for her for her education for a long term.Could you please advice me as to which is good for her.Please advice me on both single investment and monthly investment plans.
Thanks in advance,
Regards,
Liji
jayant bhat says
Ask yourself:
What if you die:
do you have sufficient life cover? Do you and your family members have enough Mediclaim? Do you have personal Accident cover? Do you have Critical Illness Product? Is your house insured.
What if you Live?
you have asked for an investment plan for your daughter – Have you thought about your pension or old age survival plans.
BTW, Suppose you want to invest 1 Lac every year, then Invest around 25% in PPf, 50% in Equities or equity related products like Mutual Funds. dont opt for too many MF products, remaining 25% in Gold ETF.
This is just a notional calculation. Actually, you have to spend a bit of fees to a professional financial planner who will chalk out a nice investment and Life cover plan for you after indepth discussion and your risk apetite.
Liji Bobby says
Hello Sir,
Need your advice.I have a daughter who is 1 year old.I was planning for a good investment plan for her for her education for a long term.Could you please advice me as to which is good for her.Please advice me on both single investment and monthly investment plans.
Thanks in advance,
Regards,
Liji
jayant bhat says
Ask yourself:
What if you die:
do you have sufficient life cover? Do you and your family members have enough Mediclaim? Do you have personal Accident cover? Do you have Critical Illness Product? Is your house insured.
What if you Live?
you have asked for an investment plan for your daughter – Have you thought about your pension or old age survival plans.
BTW, Suppose you want to invest 1 Lac every year, then Invest around 25% in PPf, 50% in Equities or equity related products like Mutual Funds. dont opt for too many MF products, remaining 25% in Gold ETF.
This is just a notional calculation. Actually, you have to spend a bit of fees to a professional financial planner who will chalk out a nice investment and Life cover plan for you after indepth discussion and your risk apetite.
Jayant Bhat says
Single premium ULIP wont be of much use. Frankly speaking, If you are investing for your brother’s son, then you wont be able to gain any tax benefits out of the payment. Use the Gift option instead.
Mutual Funds: Reliance Growth and SBI Magnum have given stable returns. Offlate Birla Mutual Fund has offered some very good products. If you directly visit the company outlet, then you will save 1.5 to 2% commission too. Would make a good difference, if the amount to be invested is high.
Avoid investing in NAV Guaranteed products. Check Titanium Plus of Birla SunLife as you can pay 3 years premium upfront and there by it becomes regular premium product.
Wont you be interested to gift them shares of Big Companies like RIL,Wipro,Tata etc…Think about it.
P.Ramachandra Rao says
I would like to invest (single payment method) for the two daughters of my brother’s son aged 6 and 4 years. My idea is that they should get Rs 1oo,000 each after say about 10 years. Also the investment amount should come under sec 80-C for I.Tax purpose. Pl say if there any plans that suit to my requirement.
abhirama says
How do I calculate the percentage returns for the IDBI Fortis insurance? I am trying to compare the returns of Fortis to that of bank FD. I get confused by the many ways to calculate interests 🙁
Mohan says
Don’t worry! you are not alone 🙂 I suggest you go through the product details on their site and try to calculate. If you still don’t get that, get the assistance of their customer care… that should make your life simple!
Jayant Bhat says
@Srikanth Matrubai
MetSmart Plus is a great product with minimal charges. However, if at all you have to opt for a ULIP, opt for Met Smart Premier as the death benefit offers Sum Assured + Account Value.
Best part about Met Smart is it offers additional cover by default. e.g. at a younger age Met Smart(Plus or Premier) would offer min 30 times life cover of the premium paid while others will offer you min 5 times life cover.
pay 1 lac premium with MetLife – you get a cover of 30 lacs
pay 1 premium with most of the other cos – you a get cover of 5 lacs
plus the initial charges are minimal.
Jayant Bhat says
@Srikanth Matrubai
MetSmart Plus is a great product with minimal charges. However, if at all you have to opt for a ULIP, opt for Met Smart Premier as the death benefit offers Sum Assured + Account Value.
Best part about Met Smart is it offers additional cover by default. e.g. at a younger age Met Smart(Plus or Premier) would offer min 30 times life cover of the premium paid while others will offer you min 5 times life cover.
pay 1 lac premium with MetLife – you get a cover of 30 lacs
pay 1 premium with most of the other cos – you a get cover of 5 lacs
plus the initial charges are minimal.
Srikanth Matrubai says
dear mohan,
Normally I am not in favour of ULIPs.
But somehow, Met Smart Plus looks attractive to me.
Have you gone through the scheme.
If so, do give your review.
Srikanth
Jayant Bhat says
@Vinod
Hi Vinod,
Please note that the below mentioned points are purely my opinion and are based on my 7 years experience in Life Insurance and Reinsurance field as a Senior Financial Underwriter and Risk Analyst. I have tried to give my honest view based on my experience and study:
Frankly speaking, your query can be very good prospect of business for some part time agent/advisor who make quick money by showing some good prospective insurance policies.
And Thanks to forums like this one, one can be more literate and watchful. Basically, you need to get yourself analysed financially. What I mean is get a needbased financial analysis done. As far as life insurance is concerned, agents will sell you insurance showing good valuation returns. But ask yourself two major questions first: 1. What if you live? 2. What if you die? I mean ask yourself do you have enough provisions of cash which will support your short term and long term needs.
Ask yourself, tomorrow if god forbid something unfortunate happens to you, then do you have sufficient life insurance cover so that your dependents can almost lead the same quality life without you. I understand that without main person of family there is a huge lacuna but life has to go on and your kids and spouse need money to lead a good future life.
So first insurance cover should be bought and not investment product. Say you buy an insurance product with an intention of savings first and then in about 2 years from now there is some emergency wherein you require money urgently then you would be shocked to hear that you cannot withdraw ULIPs for min 3 years. Hence saving should first be in FD’s,RD’s, etc in which atleast principal is guaranteed in case of emergencies.
What if something unfortunate event of death happens: Suppose your current income is 10 lacs per annum. Then within age of 40 when kids are very young and esp if spouse is a homemaker plus dependent parent/s, then you should have a minimum life insurance cover of 1.0 crore. Logic is if your family receives 1.0 crore claim from life insurance company and that money is kept in FD, your family gets somewhere between 8 to 10lacs per annum without any risk. This amount should easily justify and continue the same life style and education needs which you would have provided during your life.
few points to ponder:
* First priority: Always a Term insurance offering a higher life cover with a small premium. Never opt for traditional Term insurance with return of premium as they work out to be costly.
*While buying a term product: Do a thorough market comparison. Do buy a term product in a hurry as you would not get anything if you survive the period. Personally, I did not shell out even 100 Rs extra for my own life insurance policy.
*Never Go for Traditional Endowment/Money back policies as they prove to be very costly in todays urban/semi urban scenario.
*If you are having Risk Taking ability and minimum 10 year premium paying capacity under all good and bad times, then go for Equity based ULIP which offers you both higher life cover and good account value with minimum upfront charges. I recommend Met Smart Premier from MetLife. Generally, amidst all ups and downs of share market, the net result at the end of 10 years should give you minimum 15% returns per annum.I am sure you are aware that the returns in ULIPs can never be guaranteed and they are always speculative.
* I you wish to invest in Safer Debt Based ULIP(max 65% in debt funds and 35% un Equity), then go for Birla Sunlife’s Dream Plan OR Childrens Dream Plan. This works out to be a combination of the cheapest Term Plan, Safer Mutual Fund and minimum guarantee of 3% on your fund value. Even in these bad share market days in the past one year, this plan has given over 8% returns on investment. At the age of 33,I am paying 26k for a cover of 1.0 crore. My sister in law is paying 20k at age of 28 for the same cover. In your case the minimum premium might be around 32k which still very good and might turn out cheapest in the industry.
*Always invest in PPF and this would prove very beneficial when you actually retire.
* as of now do not invest in any pension plan as government in in final stages of setting a Pension Fund Regulatory Authority and the new guidelines would prove benefial to wait for those who delay their pension plan esp when we all salaried have provident funds.
Trust my opinion would help in judging and taking the coreect decision. One last point, When you realise the need JUST DO IT and NEVER DELAY DECISIONS TO BUY LIFE INSURANCE as with each passing year premiums go on increasing.
In case you require my help to do a detailed financial need based analysis done, do let me as I would require 1 -2 hours of personal discussion.
Shalu Mehra says
Dear Jayant,
Can you please get in touch with me? I need your help to do a detailed financial need analysis. I am thinking of making some long term investments and need your expert help.
Thanks
Shalu Mehra
Jayant Bhat says
@Vinod
Hi Vinod,
Please note that the below mentioned points are purely my opinion and are based on my 7 years experience in Life Insurance and Reinsurance field as a Senior Financial Underwriter and Risk Analyst. I have tried to give my honest view based on my experience and study:
Frankly speaking, your query can be very good prospect of business for some part time agent/advisor who make quick money by showing some good prospective insurance policies.
And Thanks to forums like this one, one can be more literate and watchful. Basically, you need to get yourself analysed financially. What I mean is get a needbased financial analysis done. As far as life insurance is concerned, agents will sell you insurance showing good valuation returns. But ask yourself two major questions first: 1. What if you live? 2. What if you die? I mean ask yourself do you have enough provisions of cash which will support your short term and long term needs.
Ask yourself, tomorrow if god forbid something unfortunate happens to you, then do you have sufficient life insurance cover so that your dependents can almost lead the same quality life without you. I understand that without main person of family there is a huge lacuna but life has to go on and your kids and spouse need money to lead a good future life.
So first insurance cover should be bought and not investment product. Say you buy an insurance product with an intention of savings first and then in about 2 years from now there is some emergency wherein you require money urgently then you would be shocked to hear that you cannot withdraw ULIPs for min 3 years. Hence saving should first be in FD’s,RD’s, etc in which atleast principal is guaranteed in case of emergencies.
What if something unfortunate event of death happens: Suppose your current income is 10 lacs per annum. Then within age of 40 when kids are very young and esp if spouse is a homemaker plus dependent parent/s, then you should have a minimum life insurance cover of 1.0 crore. Logic is if your family receives 1.0 crore claim from life insurance company and that money is kept in FD, your family gets somewhere between 8 to 10lacs per annum without any risk. This amount should easily justify and continue the same life style and education needs which you would have provided during your life.
few points to ponder:
* First priority: Always a Term insurance offering a higher life cover with a small premium. Never opt for traditional Term insurance with return of premium as they work out to be costly.
*While buying a term product: Do a thorough market comparison. Do buy a term product in a hurry as you would not get anything if you survive the period. Personally, I did not shell out even 100 Rs extra for my own life insurance policy.
*Never Go for Traditional Endowment/Money back policies as they prove to be very costly in todays urban/semi urban scenario.
*If you are having Risk Taking ability and minimum 10 year premium paying capacity under all good and bad times, then go for Equity based ULIP which offers you both higher life cover and good account value with minimum upfront charges. I recommend Met Smart Premier from MetLife. Generally, amidst all ups and downs of share market, the net result at the end of 10 years should give you minimum 15% returns per annum.I am sure you are aware that the returns in ULIPs can never be guaranteed and they are always speculative.
* I you wish to invest in Safer Debt Based ULIP(max 65% in debt funds and 35% un Equity), then go for Birla Sunlife’s Dream Plan OR Childrens Dream Plan. This works out to be a combination of the cheapest Term Plan, Safer Mutual Fund and minimum guarantee of 3% on your fund value. Even in these bad share market days in the past one year, this plan has given over 8% returns on investment. At the age of 33,I am paying 26k for a cover of 1.0 crore. My sister in law is paying 20k at age of 28 for the same cover. In your case the minimum premium might be around 32k which still very good and might turn out cheapest in the industry.
*Always invest in PPF and this would prove very beneficial when you actually retire.
* as of now do not invest in any pension plan as government in in final stages of setting a Pension Fund Regulatory Authority and the new guidelines would prove benefial to wait for those who delay their pension plan esp when we all salaried have provident funds.
Trust my opinion would help in judging and taking the coreect decision. One last point, When you realise the need JUST DO IT and NEVER DELAY DECISIONS TO BUY LIFE INSURANCE as with each passing year premiums go on increasing.
In case you require my help to do a detailed financial need based analysis done, do let me as I would require 1 -2 hours of personal discussion.
Shalu Mehra says
Dear Jayant,
Can you please get in touch with me? I need your help to do a detailed financial need analysis. I am thinking of making some long term investments and need your expert help.
Thanks
Shalu Mehra
Jayant Bhat says
Thanks for your interest Shalu. The best part is your mindset to seek advice for investments. This is what is required amongst most of us as against the trend of adhoc investments. Together we will ensure that you get the best investment tool available.
Vinod says
Hi Mohan,
I am 37 years old and having 2 childrens Elder one is 8 yrs old I would like to know which is the best insurance/INVESTMENT plan so I can get good returns for my childs edjucation?
Appreciate your advice
Thanks
Vinod
Mohit says
Thanks Jayant for the valuable comments.
Mohit says
Thanks Jayant for the valuable comments.
Jayant Bhat says
BSLI’s Dream Plan is what I consider the cheapest term plan. It is an ULIP which offers highest enhanced coverage. If you want to add investment portion, then you can add your money as TOP UP. At age of 28, one can opt upto a cover of 1.0 crore with just a premium of 20,000/-. At about 33 years age, the premium comes to 26,000/-. This is a debt based plan and any investment portion gets invested in ratio of upto 65% debt and 35% equity. In any kind of market, your money is much much safer compared to other products.
Mohan says
@Mohit
I haven’t gone through the details of Birla Sunlife Dream plan. When time permits, I will go through them and write here. Keep coming back 🙂
Mohit says
Hi Mohan, how is Birla Sunlife Dream plan, they are telling it covers term plan also, is it true?
Which one is good term insurance, Birla Sun life Dream plan or SBI term plan ?
Mohit says
Hi Mohan, how is Birla Sunlife Dream plan, they are telling it covers term plan also, is it true?
Which one is good term insurance, Birla Sun life Dream plan or SBI term plan ?
chinthan says
@Deepak
Hi Deepak,
Yes. IDBI offers from age 8 to 55 years.
Pramod says
IDBI Fortis had launched Bondsurance before Jeevan Aastha.They are giving 5 times cover across the tenure of 5 or 10 years where as LIC gives 6 times only the first year.So it looks more like investment than Investment and Insurance.With LIC many people are confused and feel life cover exists the same for full tenure, I have invested in both.
David says
I think all major players are feeling the credit crunch and want to have some liqidity by woing customers though these kind of plans. I don’t have a problem as long as policy buyers feel it is good for them and go with these kind of policies. LIC is obviously the pioneer to come up with such a plan and other players like IDBI is following Jeevan Aastha.
Deepak says
Good comparison.. I think IDBI is offering this for people between 8-32 years only.. am I wrong?
Deepak says
Good comparison.. I think IDBI is offering this for people between 8-32 years only.. am I wrong?