Future Generali has launched a unit-linked plan (Ulip) called Wealth Protect. The Ulip offers protection of 7 to 30 times your annual premium, depending on the investor's age, term of the policy and the choice of the investor. On the investment side, it offers six investment options which target investors of different risk appetites.
LOYALTY ADDITION:
The guaranteed loyalty addition is 5% of the first year annualised premium if the premium amount is below . 25,000 and 7.5% for the premium amount above . 25,000. On maturity, the insurer pays the fund value plus guaranteed loyalty addition. For example, you will get a guaranteed addition of . 1,250 over and above the fund value at maturity for a premium payment of . 25,000 for 10 years.
FUND OPTIONS:
An investor should ideally opt for Future Apex Fund or Future Opportunity Fund. The apex fund allows the investor to invest up to 50% in debt. The equity exposure of the portfolio falls in the range of 50% to a maximum of 100%. The Opportunities fund offers 20:80 debt to equity ratio for an investor. The logic is the cost structure of the product is steep. Hence, an aggressive fund, which has a higher exposure in equity, has the ability to deliver returns after accounting for the charges. Under the future secure option, the Ulip invests in low-risk instruments such as bank deposits, certificate of deposits etc. "This fund is advisable for short-term investors since interest rates are expected to rise further. The investor could shift to another fund option once the interest rates taper out," says GN Agarwal, the chief actuary and chief risk officer of Future Generali. Historically, such products have offered a return of 5-6%. A premium of . 25,000 for future secure fund attracts charges such as premium allocation at 5% (for the first year), fund management at 1.10% and policy administration at 3.75% among other charges. These charges alone add up to 9.85%. Even after the sixth year, the costs add up to 5.95% of the premium.
WHY YOU CAN GO FOR IT:
Future Apex Fund and Future Opportunity fund are aggressive equity oriented investments which can deliver promising returns.
WHY YOU CAN AVOID IT:
The cost structure is steep just like other Ulips. You have cheaper investment options in other equity investments, which can be supplemented with a simple term cover.
