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ULIP Review: Tata AIG Life Insurance Gyan Kosh



Tata AIG Life Insurance Company has launched Gyan Kosh, a nonparticipating unit-linked endowment insurance plan. The plan has been designed to provide financial protection for children's education, marriage, providing funds for setting up a business and so on.


A parent has two protection options: Security Net, with inbuilt waiver of premium, and Family Income Benefit and Safety Net, with inbuilt waiver of premium benefit. Both the options provide dual benefits, ie, pay death benefit to the nominee in the case of death of the insured and policy benefits will continue. The company will waive all future regular premiums in the case of death or total permanent disability of the insured.


Besides, the Security Net option provides your family with a readjustment income of 1% of the basic sum assured for 100 months or till the end of the policy term, whichever is earlier, on death or total permanent disability.
The investor (parent) has a choice of seven funds options. Under waiver of premium option, the policy holder can choose to receive either 100% of future premium in the policy, or 50% of the premium in the policy, with the remaining 50% to be paid to the nominee.


CHARGE STRUCTURE: Premium allocation charges: The premium allocation charges in the first three years vary from 2% to 3% depending on the size of the premium. From the fourth to the 10 th year, the charge will be 2%, while from the 11 th to the 15 th , it will come down to 1%. There is no premium allocation charge from the 16 th year to the 20 th year.

POLICY ADMIN CHARGES:

The charges are kept comparatively high. It is . 70 per month for premiums between . 20,000 and . 29,999; . 100 per month for premiums between . 30,000 and . 49,999; and . 150 per month for premiums of . 50,000 and above. The charges will increase by 5% compounded every year. For instance, if a policy holder buys a term of 20 years and chooses to pay an annual premium of . 50,000 in the first year of the policy, he will pay . 1,000 (2% of . 50,000) towards premium allocation and . 1,800 (. 150 x 12) towards policy admin charges. The total, . 2,800, is 5.6% of the annual premium.


There will be no premium allocation charge in the 20th year of the policy, but the policy admin charges will come to . 4,776, which is 9.55% of the annual premium of . 50,000.


All the features and choices of funds available in the plan are good, but the policy admin charges are comparatively high. The management charge will be at least 0.65% and can go up to 1.20%. FMC is the highest in the equity fund option and lowest in case of liquid fund.

WHY YOU SHOULD BUY:

There is a good spread of fund options covering investors with different risk appetites.

WHY YOU SHOULD NOT:

The cost structure is comparatively high.

 

 

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Also, know how to buy mutual funds online:

 

1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

 

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

 

3) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-hdfc-mutual-funds-online.html

 

4) Sundaram Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-sundaram-mutual-funds-online.html

 

5) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

 

6) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

  

7) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

 

8) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

9) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html

 

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