Skip to main content

ULIP Review: MAX NEW YORK Life Flexi Fortune (MNYL)

 

 MAX NEW YORK Life Flexi Fortune (MNYL) is a type II Unit Linked Insurance Plan (Ulip) that offers nominees a sum of both death benefit and fund value in the case of an unfortunate event. The unique feature of this scheme is the automatic jump in the sum assured every year by 10%, starting from the second year till the end of the policy term to keep pace with growing inflation. The scheme offers seven funds — investment options — of which four are more than six years old. They have performed well in both bullish and bearish phases of the stock market.

COST STRUCTURE:

Flexi Fortune's cost structure is in line with most of its peers. Though the premium allocation charged by the scheme is a little high, its low policy administration charge keeps cost structure balanced. Mortality charges are very high under the plan and become more precarious for investors as sum assured increases. Mortality charges for policies with a tenure of 10 years are almost 50% higher than the usual LIC charges.

BENEFITS:

Flexi Fortune offers an exhaustive death benefit, giving investors choice to opt for a sum assured, between 10X to 30X the annualised premium. Furthermore, it automatically increases 10% on the original sum assured each year from the second year till the policy tenure. This is an in-built feature and provided at no upfront cost. However, any increase in the sum assured will lead to an increase in the mortality charge, thereby impacting the fund value. So, the cost surely exists, though in a different manner.

PERFORMANCE:

Although the scheme is only a few months old, the funds under the scheme are very much in place for long. Unlike other insurance companies which issue new funds with new schemes, MNYL has stuck to its old funds. Four of its funds — Balanced, Conservative, Growth and Secured Funds — are more than six years old. All these have exemplary track records. They have been well managed and have continuously outperformed their respective benchmarks. The Growth Super Fund, which was launched in 2007, has generated 15% returns as against 8.3% of its benchmark, the Nifty. Though the Money Market Fund and the Secure Plus Fund were rolled out two years ago, they still struggle to outperform the benchmark. There are debt-oriented funds and have very low asset under management.

PORTFOLIO:

Max New York Life has a balanced investment strategy. The equity portfolio like most insurance companies is tilted towards large caps, with just about 15-20% exposure in the mid-cap stocks. The fund manager is highly bullish on the consumption story of India, particularly the banking sector. Almost 30% of the equity portfolio is invested in banking stocks. Recently, the fund manager reduced the oil and gas exposure primarily due to the unrest at West Asian companies and the increasing crude price.


   Unlike many other insurance companies, the fund manager churns the portfolio frequently. Currently, the portfolio turnover ratio of this fund is 90%, which means, on an average, the fund holds a stock for 12 months.

DEATH/MATURITY BENEFIT:

Flexi Fortune offers the twin advantages of both sum assured and fund value on the death of the life assured. However, on maturity, the policyholder receives only the amount accumulated in the fund. For instance, if a 30-year-old healthy male invests 50,000 per annum in the Balanced Fund for 20 years, the sum assured will be 30 times the annual premium as prescribed in the plan. So, the total sum assured receivable, in the case of any eventuality, would be 15 lakh. By the end of 20 years, assuming the rate of return of 6% and 10%, the fund value shall be 10, 56,144 and 18, 46,488, respectively, receivable at maturity. However, in the case of demise of the policyholder in the 10th year, the nominee receives the sum assured of almost 27 lakh, along with the existing fund value at that time.

OUR VIEW:

Flexi Fortune, as the name suggests, is flexible enough to suit the requirements of different people and different needs. The increasing sum assured feature is unique to this plan. However, the same makes it costly and more insurance oriented rather than wealth building. The high risk return appetite investor can look at Growth and Super Growth funds, as they have generated robust returns over years now.

Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

WEALTH TAX

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
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