Lic samrudhi plus or samrudhi minus:
Recently LIC OF INDIA have launched new Unit Linked Insurance NAV Guaranteed Plan.
Rather than presenting entire details,we have focused few important things about this
Some key features of this plan are:
1.Highest Net Asset Value (NAV) of first 100 Months of policy is guaranteed at maturity:
LIC have given guarantee of highest NAV not of the returns.Finally its upto LIC upto which height they want to bring NAV.
2.Portfolio:LiC can invest upto 100% in debt products.as well as invest 100% in equity market But looking towards structure of this plan chances are quite high that allocation will be more debt oriented.
3.Policy charges:LIC is heavily advertising this product but unfortunately there is no single mention of charges in their ads.
Charges of this plan are as follows:
a) Premium Allocation charges:
For single premium policy: 3.3%.
b) For regular premium policies:
First year: 6.5%.
2nd – 5th year:4.50%.
Other charges:
Policy administration charges: Rs.30/- per month during first policy year and Rs.30/- per month escalating at 3% per annum,thereafter throughout policy year.
Fund management charges:0.9% p.a.
Guarantee charge : 0.40% p.a.
Mortality charges towards insurance depending upon age.
If anyone is paying a premium of Rs.20000/- p.a ,he will pay Rs.1300 as premium allocation charges,Rs.360 p.a as policy administration charges,Rs.180 towards fund management charges and Rs.80 as guarantee charges.
Few charges will be in the form of cancellation of units which diminishes compounding effect in future.
As time passes,the plan will become more and more debt oriented,so after teking view of charges its difficult for fund manager to offer something better.
4.Insurance:
Minimum Basic Sum Assured:
5 year Premium paying term policies:
For age at entry below 45 years: 10 times the annualized premium
For age at entry 45 years and above: 7 times the annualized premium
Single Premium:
For age at entry below 45 years: 1.25 times the single premium
For age at entry 45 years and above: 1.10 times the single premium
b)Maximum Basic Sum Assured:
5 years Premium paying term policies:
For age at entry below 45 years: 20 times the annualised premium
For age at entry 45 years and above: 10 times the annualised premium
Single Premium Policies:
5 times the Single premium, if age at entry is upto 55 years.
1.25 times the Single premium, if age at entry is 56 to 65 years.
As policy term is 10 yrs only, what is use of insurance for 10 yrs only? Rather investors should assess their need of insurance and prefer to take pure risk cover.They can invest balance amount in instruments like recurring deposits or systematic investment plans of mutual funds ,,this combination will offer more returns .
Most of the similar products launched last year are lagging in the returns that provided by market,,then what can we expect from this plan??
Rather than presenting entire details,we have focused few important things about this
Some key features of this plan are:
1.Highest Net Asset Value (NAV) of first 100 Months of policy is guaranteed at maturity:
LIC have given guarantee of highest NAV not of the returns.Finally its upto LIC upto which height they want to bring NAV.
2.Portfolio:LiC can invest upto 100% in debt products.as well as invest 100% in equity market But looking towards structure of this plan chances are quite high that allocation will be more debt oriented.
3.Policy charges:LIC is heavily advertising this product but unfortunately there is no single mention of charges in their ads.
Charges of this plan are as follows:
a) Premium Allocation charges:
For single premium policy: 3.3%.
b) For regular premium policies:
First year: 6.5%.
2nd – 5th year:4.50%.
Other charges:
Policy administration charges: Rs.30/- per month during first policy year and Rs.30/- per month escalating at 3% per annum,thereafter throughout policy year.
Fund management charges:0.9% p.a.
Guarantee charge : 0.40% p.a.
Mortality charges towards insurance depending upon age.
If anyone is paying a premium of Rs.20000/- p.a ,he will pay Rs.1300 as premium allocation charges,Rs.360 p.a as policy administration charges,Rs.180 towards fund management charges and Rs.80 as guarantee charges.
Few charges will be in the form of cancellation of units which diminishes compounding effect in future.
As time passes,the plan will become more and more debt oriented,so after teking view of charges its difficult for fund manager to offer something better.
4.Insurance:
Minimum Basic Sum Assured:
5 year Premium paying term policies:
For age at entry below 45 years: 10 times the annualized premium
For age at entry 45 years and above: 7 times the annualized premium
Single Premium:
For age at entry below 45 years: 1.25 times the single premium
For age at entry 45 years and above: 1.10 times the single premium
b)Maximum Basic Sum Assured:
5 years Premium paying term policies:
For age at entry below 45 years: 20 times the annualised premium
For age at entry 45 years and above: 10 times the annualised premium
Single Premium Policies:
5 times the Single premium, if age at entry is upto 55 years.
1.25 times the Single premium, if age at entry is 56 to 65 years.
As policy term is 10 yrs only, what is use of insurance for 10 yrs only? Rather investors should assess their need of insurance and prefer to take pure risk cover.They can invest balance amount in instruments like recurring deposits or systematic investment plans of mutual funds ,,this combination will offer more returns .
Most of the similar products launched last year are lagging in the returns that provided by market,,then what can we expect from this plan??
Source...