Recently, we came across a person who was mis-sold a ULIP. Yes, mis-selling of ULIPs still continues. This lady got a call from her insurer, a reputed private sector insurance company, she was told that the ULIP she had purchased earlier was not performing well, and the company is discontinuing it. The company suggested that she should buy a new ULIP with better prospects. The lady fell for it and completed all the formalities as directed by the agent. But she was shocked when her bank account was debited with Rs 1 lakh, the premiums of both the insurance policies. In short, the first policy was never discontinued.
When she reached out to us through a friend, we advised her to stop her ULIPs. We told her she might lose most of her premium she paid for the ULIPs, but she would be still better off if she invest in a mutual fund. However, the lady was not ready to discontinue her ULIP investments as she was scared of losing her money.
Are you in a similar situation? Do you want to get out of your bad ULIP investments, but not convinced how you would be better off by investing in mutual funds, even after the reintroduction of long term capital gains (LTCG) tax.
Here we have tried to illustrate how it makes sense to surrender your ULIP which was mis-sold to you and invest the money in mutual funds.
We have taken two unit linked plans - from ICICI Pru Life Insurance and HDFC Life - for illustrative purpose. We have compared how investing the same amount in mutual funds works. The ULIP illustration was created using the insurer's calculators. We have taken mutual fund performance at same rate of 8 per cent as well as on 12 per cent and 15 per cent. See illustration below:
The table clearly shows that mutual funds win. If we look at the life insurance of Rs 6 lakh offered by the ULIPs, It is clearly not enough to take care of the financial need of your family after your death. If we look at a pure term insurance cover of Rs 25 lakh life cover, four times the sum offered by the ULIPs, it will cost only around Rs 300 per month. If you invest the rest of the money in a mutual fund scheme, you would still make Rs 8.44 lakh (at 8%), Rs 15.83 lakh (at 12%), and Rs 17.74 lakh (at 15%).
Mutual fund advisors say that liquidity in ULIPs is the main concern apart from the returns and the modest insurance cover. If a unit linked plan under-performs, you cannot move to any other plan conveniently. It is not the case in mutual funds. Also, if you need your money, you can easily redeem your mutual funds as against ULIP where you have to understand the terms and conditions
ULIPs are a long term product of, say, 10 or 20 years, and you cannot stick to one fund manager throughout the long term, say advisors. in ULIPs, you are stuck to a fund manager. Management risk diversification is missing in ULIPs
SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds
For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300
Best SIP Funds to Invest Online SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300 OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com
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 HDFC Capital Protection Oriented Fund – Series II 36M May 2014 NFO will be open for subscription from 16th May 2014 to 30th May 2014. The key features of the scheme are as mentioned below: Type of Scheme A Close Ended Capital Protection Oriented Income Scheme Benchmark Crisil MIP Blended Index Fund Manager Mr. Anil Bamboli , Mr. Vinay R Kulkarni & Mr. Rakesh Vyas New Fund Offer (NFO) Period 16 th May 2014 to 30 th May 2014. Minimum Application Amount Rs. 5000 and in multiples of Rs.10 thereafter Plans/ Options Offered Growth and Dividend Payout Facility Liquidity To be listed For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
A PPF account can be retained after maturity without making any further deposits. The balance will continue to earn interest till it is closed. Public provident fund or PPF remains one of the most popular savings options for the long term despite a gradual decline in interest rates over the years. PPF accounts have a maturity period of 15 years and they can be extended. If there is no fund requirement, financial planners say, PPF account holders should extend the account beyond 15 years. In terms of income tax implications, PPF accounts enjoy the benefit of EEE (exempt-exempt-exempt) status . Under Section 80C, contribution up to Rs 1.5 lakh in a financial year qualifies for income tax deduction. The interest earned and maturity proceeds are also tax free. What are your options when a PPF account matures? 1) A PPF account can be closed after the expiry of 15 financial years from the end of the year in which the account was opened. 2) The subscriber can retain his
Best SIP Funds Online SUNDARAM SELECT MIDCAP is a mid-cap focused fund has shown remarkable consistency in outperforming both its benchmark index and the category over many years. It takes a sharper tilt towards mid-caps compared to its peers. While the fund manager used to take large positions in his conviction picks, he has moderated exposure to his top bets over the past year. He has also chosen to stay away from capital guzzling businesses instead favouring those with efficient capital allocation practices. SUNDARAM SELECT MIDCAP fund boasts of a superior risk-reward profile compared to many of its peers, and while it has underper formed slightly over the past one year, its proven track record in the hands of a capable fund manager provides comfort. It remains a worthy pick in the midcap basket. SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich For further inform
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 HDFC Prudence Fund Balanced funds are excellent investment options for investors with moderate risk tolerance, since they give very good risk adjusted returns. It is very surprising why balanced funds are not nearly as popular as diversified equity funds, despite being around in India for nearly two decades. Balanced funds are essentially hybrid funds with both debt and equity in its portfolio mix, to balance the portfolio risk. These portfolios typically hold up to 70% of its portfolio assets in equities and the balance in fixed income. On a risk adjusted basis, balanced funds have delivered excellent returns compared to other equity fund categories, e.g. large cap or diversified equity mutual funds. The chart below shows a comparison of category returns between large
