Following the recent spate of unitlinked insurance plans (Ulips) launched by several insurance companies in the wake of new Irda guidelines, SBI Life Insurance has launched a low-premium Ulip called Saral Maha Anand.
The Product:
The minimum annual premium is Rs 15,000 and the maximum yearly premium is capped at Rs 29,000. The sum assured component ranges from 10-20 times of the annual premium and is restricted to a maximum of Rs 7.5 lakh. SBI Life Maha Anand is meant for investors in the age group of 18-55 years. The maturity age is up to 65 years. Like most other Ulips, policyholders can opt for a yearly, half-yearly, quarterly or monthly payments. The product offers customers four investment options depending on their risk profiles: Index, Equity, Balanced and Bond fund. It also offers partial withdrawal of up to 15% of the fund value after completion of five years. Investors can use this window to meet emergency liquidity needs.
Charges:
Premium allocation charge is 6.25% of the premium amount for the first year and it goes down to 3.75% between the second and fifth year, and from thereon, further to 3% until the 10th year of the policy. The policy administration charges are Rs 33.33 per month. The fund management charges are 1.25% for the index fund and balanced fund, 1.35% for the equity fund and 1% for the bond fund. Financial advisors say that the cost structure of this regular Ulip is still high despite the flexibility of low premium. Hence, if an investor wants to make the most out of this product, s/he has to invest for the maximum possible term and invest a higher amount to earn decent returns.
Why Go For It?:
The low premiums could interest those who are unable to afford the huge premiums payouts in most other Ulips.
Why not?:
Though it's a low premium product, the charges are not significantly lower than those of the company's other Ulips.
