Skip to main content

ULIP Review: Aegon Religare Invest Maximiser Plan

 

 

Aegon Religare Invest Maximiser Plan is a basic plan with low flexibility especially in terms of policy tenure and fund options

 


   AEGON Religare Invest Maximiser Plan is a plain vanilla product launched in August 2009. It's a Type I plan that offers the higher of the sum assured and fund value on maturity. This product offers four investment options (funds). One can choose from equity, debt or balanced portfolio.

COST STRUCTURE:

The product has nominal premium allocation charges. Additional premium paid towards investment purposes only (top ups) are charged 1% as allocation charge. With an initial outgo of Rs 480 per annum, its policy administration charges seem to be low. But, with the continuous inflation of 5% p.a., this increases to Rs 1,500 by the end of the policy term (that is fixed at 25 years in this policy.) Considering these charges, if the fund were to generate returns of 6% and 10% , the net yield in the hands of investors would be around 4.4% and 8.4% respectively per annum. This is fairly higher than 3.8% and 7.7% annualised net return offered by its peer products.

BENEFITS:

As an incentive to policyholders, the policy gives loyalty units at 1.5% of the fund value to its policyholders, allotted every third year starting from the tenth policy year. Apart from that, it allows policyholders to take the maturity proceeds in installments over a chosen period (not exceeding five years). The policy also offers riders of accidental death and disability benefit on payment of additional charges.

PERFORMANCE:

Aegon Religare Invest Maximiser is only a year old but the funds have been running for two years now. Except for the debt fund, none of the funds have performed well. The balanced fund, which has 65% of equity, has grossly under performed the Crisil Balanced Fund Index, its benchmark. In the past two years, the net asset value (NAV) of Aegon Religare Enhanced Equity Fund has grown at compounded annual rate of 13.8%, which is fairly lower than the 16-23% returns provided by similar funds of peers. On the contrary, the debt fund has done better than most of the other debt investment options.

PORTFOLIO REVIEW:

Aegon Religare Life Insurance follows a defensive fund management strategy. The company has high exposure to cyclical sectors like financial services. It is optimistic about FMCG and financial sectors. In contrast, it is quite pessimistic about metal, telecom, utilities and oil and gas sectors and has reduced the exposure in the same. It also has low exposure in healthcare. Real estate and media, the sectors that are underperforming, are absent from Invest Maximiser's portfolio.

DEATH/MATURITY BENEFITS:

Upon maturity, the policyholder receives the amount accumulated in the fund, whereas in case of death, higher of the fund value and sum assured will be received. For instance, say, a 35-year-old healthy male invests Rs 50,000 per annum in Enhanced Equity Fund for a period of 25 years. The total sum assured receivable, in case of any eventuality, would be not more than Rs 2.5 lakh. By the end of 25 years, assuming the rate of return of 6% and 10%, the fund value shall be Rs 22,04,284 and Rs 40,20,404 respectively, receivable at the maturity along with the maturity bonus. However, in case of death of the policyholder, say in the sixth policy year, the nominee shall receive higher of the sum assured of Rs 2.5 lakh and the accumulated fund value.

OUR VIEW:

This is a simple Type I product, having fairly low cost structure but sum assured is limited to five times the annual premium. Not only are the investment options limited to four, the portfolio returns of the scheme also lag the returns of other similar funds. Another point to note is that even though the yields are better for the Invest Maximiser Plan, this is mainly due to a much longer fixed policy tenure of 25 years. Further, the policy doesn't have any premium holiday option either. An alternative to the product would be to take a term policy and invest the rest in high performing mutual funds. In case one needs tax exemption, one can opt for equity linked savings scheme (ELSS).

Popular posts from this blog

Guide to pension plans in the form of Insurance

  Pension plans ensure that you are financially secure during your golden years. Take a look at the important aspects that you must keep in mind while opting for one...      Gone are the days when a leading criterion for choosing an employer was the type of pension plan that came with your salary package. Today, more important issues like matching of skill sets to job requirements, scope for personal and financial growth, etc. have come to the forefront. However, this has left individuals with the responsibility of financially planning for their golden years. And it's all for the best as there are a variety of pension plans available in the market to suit different individuals and their specific needs. WHAT ARE PENSION PLANS?     In a pension plan, you are required to pay premiums for a certain number of years and once you reach the retirement age, the insurer returns a lump sum amount that can be then used to purchase an annuity or stream of income for the rest of your life....

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...

Ways to invest in Gold - Which is best option?

Tax Saving Mutual Funds Online Current open Infra Bond Application form In recent years gold has delivered exceptional returns. In a span of about 6 years — from 2006 to 2011 — gold has given an average return of an "incredible" 29% per annum. Therefore, it is but natural to be attracted towards gold. But let's not forget history. In 1980, gold prices jumped from 300 $/oz to 600 $/oz due to Gulf crisis. But soon thereafter fell to about 450 $/oz in 1981 and then NEVER crossed the $450 mark until 2006. In other words, gold gave ZERO returns over a period of nearly 25 years. The question, therefore, arises — are we going to witness something similar once this worldwide financial crisis is over? Is this a bubble that will burst? The answer, unfortunately, will be known in the future only. Therefore, caution is advised, if you intend to invest in gold — especially now when it is trading at historic levels of 1600-1800 $/oz. However, ...

More on Mutual Funds

What Is a Mutual Fund ? A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. Anybody with an investable surplus of as little as a few thousand rupees can invest in Mutual Funds. These investors buy units of a particular Mutual Fund scheme that has a defined investment objective and strategy The money thus collected is then invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the scheme's stated objectives. The income earned through these investments and the capital appreciation realized by the scheme are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.   What Are The Types of Mutual Fund Scheme...

PF e-Passbook

  Provident Fund e-Passbook   The Employees Provident Fund Organisation now runs an e-passbook service that enables members to log in and access their provident fund accounts . This facility enables tracking of the money and ensuring that the employer's contribution has been deposited into the account. This facility is available to those whose accounts are with the central provident fund commissioner for maintenance and can be availed at members.epfoservices.in . Registration A member can register at the portal easily by using PAN , Aadhar or passport number as the log in and the mobile numbers as the PIN . This combination enables easy retrieval of information. Accounts After logging in, the member has to choose the state where the employer is located, and enter the code number of the employer, account number and name. These details can be obtained from any existing PF document . PIN To download the passbook, the member will request...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now