Dear Friends , Regards from RASIKFUNDA.
Here is an investment idea, worth it’s while for consideration by those in India. The overall economic scenario across the world was in tatters. The Markets all over are slowly recovering. However, there is still a debate on the point whether we are in a “Bull Market or this is just a Bear Market Rally”. Until clear picture emerges it will be prudent to play safe with an eye to augment your Investment with some add-on feature like say Insurance/accident cover etc. which will at least make-up for any temporary downturn/fluctuation.
With this objective in mind I wish to present LIC Mutual Funds’ “ULIS” Scheme, details whereof are narrated hereunder for your perusal.
LIC Mutual Fund’s—Unit Linked Insurance Scheme ( ULIS )
As the name suggests this is a Unit Linked Life Insurance Product, but surprisingly “With Least/No Charges”!!! I had been averse to recommend ULIP Schemes since I strongly believe that one must keep one’s Insurance Needs and Investments separate. My major reservations were,
1. High Administrative Charges being deducted from First Installment, which will be for the Longest Tenure.
2. Annual Allocation Charges, which No Fund-House levies for churning its Portfolio from time to time.
3. Maximum age at Maturity caped at 65 years. One may need longer Insurance cover in view of improved longevity.
4. Most of the ULIPs, in the unfortunate event of Claim, pay Either Insurance Cover or Fund Value whichever is Higher. Really speaking One has regularly paid Insurance Premium, so the Nominee is entitle to receive the cover amount. The balance amount is invested and would have acquired some Value over the time. This too should belong to the Nominee.
5. The entire Insurance premia paid will be appropriated on Investor Surviving the term of policy.
All these objections are addressed in the said ULIS Scheme as stated hereunder:
1. There are NO ADMINISTRATIVE CHARGES applied /apportioned from First Premium. Only relevant part being Insurance Premium as per age is deducted and the balance amount is Invested at your selected interval.
2. There are No Allocation Charges either, on annual basis.
3. Maximum age at Maturity is 70 and not 65. Only, if age at beginning is aver 55 then policy is issued for 10 years only, i.e. up to say 66+.
4. In the event of unfortunate claim arising during policy tenure, the Nominee will get BOTH, i.e. Sum Assured under Policy and also Fund Value.
5. There is a partial refund of Premium in the form of a Guaranteed Bonus at Maturity ranging from 5% to 15% depending on Policy term ( 5years,10years or 15years). This is calculated on the Target amount i.e. Insurance amount which is amount paid by the investor.
Looking at all these advantages ULIS scores well above all ULIPs in terms of costs, returns and benefits.
The three terms available are 5years, 10years and 15years, and payment can be in any Mode namely, Monthly, Quarterly, Half yearly , Yearly or even as a Single premium. There are NO Medical Examination Requirements, just sign a Good Health Declaration. However, since this is “Good Faith” Policy, there are some preconditions attached. In case the claim arises within Six months of commencement, Only Fund Value is payable. Claims up to One year will be settled at 50% of Sum Assured +Fund Value. After One year Full benefits will be available. It may be noted that stated conditions DO NOT apply in case of Accidental Death.
In view of these benefits this ULIP definitely offers better value. Their strategy also is similar to a Balanced Fund. Investing 65% in Equity and 35% in Debt, which will give steady returns in the long run which we contemplate say 15 years. Revival, in the unfortunate case can be done in longer time span of One year compared to LIC Policy’s 6 months max. Also, there won’t be any Medical Check-up hassles’, just pay arrears without any interest and Policy is renewed.
Lastly, I have ascertained from their past records, an average retunes of about 14.5% CAGR can safely be expected. This with Life cover and Free Accident Cover makes it an excellent combination. Do give it due consideration. I am inclined to get it in your Portfolio as a Balancing factor !!!.
With Regards,
RASIKFUNDA
