RE:RE:Reliance is cheapest
by amit tyagi on Dec 08, 2007 02:18 PM Permalink
rajneesh if reliance doesnt pay u ur claim on your death . please take from me as reliance will definately going to give u more then u have earned till now. just look n find out our growth in any sector..............
RE:Reliance is cheapest
by T a s i n on Dec 08, 2007 08:58 AM Permalink
HDFC Standard Life is charging me Rs.8877 for 30 yrs and 25 Lakhs coverage. I am 29 yrs old.
of term plan and investing in mutual funds beats any ULIP or other such products hands down. ULIP is only good for those who do not have time to invest on their own. Also avoid ULIPs from ICICI they charge very high premium allocation charges and FMC. One of my friends recently bought a ULIP from ICIC where he pays premium of 1 lakh for 3 years and the premium allocation charge for 1st year is a massive 18%.
RE:combination
by Mukesh Pruthi on Dec 07, 2007 11:54 PM Permalink
icici is charging 18% in first year, other co are charging much higher?co is sharing this with advisor( 12% )similer most talked lic plan money plus is charging 26.5% with Rs 60 per month also. pruthi ji insurance wale 9811020128
RE:combination
by puneet mathur on Dec 07, 2007 11:31 PM Permalink
Dear Mr. Rao ICICI pru Charging 18% premium allocation in first year but u should also consider if company is not charging this much how can they survive after all they are providing a life cover, (much higer than Premium) moreover if all the money is invested in equity than how can company sustain as Sum assure is there in insurance plan. Every invester should not take Insurance as Mutual fund, they have low entry load but Life cover in not there in MF. But Both are imp in there own way in evry portfolio. Rgds Puneet Mathur
The ULIP premium required to be paid for a 34 year old to get a life cover of 25 lakhs is Rs.31,250/- For three years, this totals to Rs.93,750/- as against the term plan premium of Rs.2,38,750.
RE:Term plans and real story
by Mukesh Pruthi on Dec 08, 2007 12:03 AM Permalink
for a person aged 34 premium for 25 lac term plan of icici prulife for 15 years is Rs 6298- only. and RS 4150 will be deducted in ulip - life time gold for 25 lac sum assured. pruthi ji insurance wale 9811020128
RE:Term plans and real story
by Girish Rao on Dec 07, 2007 05:09 PM Permalink
which company offers that scheme ? can you give me the link to that scheme.
RE:Term plans and real story
by Manoja on Dec 07, 2007 05:15 PM Permalink
Girish this is from ICICI. Fair enuf, ICICI charges 18% in the first year as admin charges.. which ULIP charges lower than this??
Also, you are not unduly bothered when the WHOLE of your money is taken away as premium in Term Plan. But you whine if a part of the premium is taken away as admin charges..
RE:RE:Term plans and real story
by Indian on Dec 07, 2007 08:51 PM Permalink
Manoja - thanks for your detailed note.
However, the "whole of premium" in term plan still works out to be far less than the "part of premium" in a ULIP. That is because the ULIP premium is far more than term plan premium.
5. In case of ULIP, after the first three years of premium payment, one can take a premium holiday and the life insurance cover still continues.
6. Using the switching option given in the ULIP, one can actually ensure that the investment portion of the premium is in the best managed fund. The NAV and the fund performance of the ULIP plan is available on the website of the insurer & also gets published in newspapers.
7. In ULIPs, as the fund value grows, the insurance payout actuall decreases unlike in term plan where it remains constant thruout the life of the plan.
This, then is the real story of term plan. If one is looking for a higher cover, the cost in term plan is quite prohibitive!!!
1. Term plans look cheap in the first year. If one were to consider the overall premium paid, it will be quite a lot of money. In the given instance, the total premium outflow would be Rs.238,750/-
2. There has been repeated lies uttered by the armchair financial advisors and newspaper columnists about the commission earned by the agents on term plan and ulips. In the example taken by this author, the term plan commission earned by the agent is Rs.3343 in the first year. By the time 25 year period is thru, the agent would have earned Rs.15,280. On the contrary in case of ULIPs, over the three year period one is required to pay the premium, commission earned by the agent is Rs.7,916. Roughly about half the total premium earned.
3. In case of ULIPs, even in the worst case scenario of the fund generating a return of 8% over a 20 year time period, the initial three premiums paid is more than sufficient to cover the life insurance. But considering the fact that the fund managers of ULIP are also investing in the same equity market where the MF fund managers are putting the money, it is likely that the real rate of return would be around 15% . In this scenario, a person who would have taken the ULIP, will enjoy uninterrupted life cover as long as he wants PLUS also takes home a substantial amount of money.
4. In case of term plans, if one premium is missed the policy lapses. During the lapsation period, if the person dies, nothing is paid to the family.
RE:Term plans and the real story...
by natraj tanjore on Dec 07, 2007 11:58 PM Permalink
You are forgetting one important factor! The term insurance scores heavily in case of death in the first five to 10 years of the policy, which isnt the case of ULIPS. And insurance is supposed to cover an eventuality and not give u investment returns. So it is always better to take a term cover and invest the balance amount of premium (which u would have paid on higher terms for whole life / ulip insurance) in Systematic investment plans.
RE:RE:Term plans and the real story...
by natraj tanjore on Dec 08, 2007 12:02 AM Permalink
Also the term insurance is ideally suited during the periods when your family is very vulnerable! i.e. when the kids are below the age of 16! In such cases the term insurance amount also would be lower as your age at the time of taking cover would be in early 30s and premiums are better for under 40s. The advantage of term insurance is that u take the cover so long as u are financially insecure / inadequate for an eventuality. The moment your insecurities are taken care off, one may / may not continue!
RE:Term plans and the real story...
by Manoja on Dec 08, 2007 11:02 AM Permalink
Mr.Natraj Tanjore,
Let us look at it this way. A person takes a ULIP when he is 25-30 years of age. What are the probabilities that death will happen in the first 10 years??? Barring accidents, I would say this scenario is very minimal. Considering the high pressure jobs we have and the unhealthy lifestyle we carry on, the body would have taken its toll by the time one gets into the forties. This also the time when the kids are getting into their teens and responsibility is highest.
So consider this scenario. If this person has taken a ULIP when he is 25-30, in the first three years he has completed his requirment of paying the premium. After this period of three years are over, he can then shift the ENTIRE premium that was being paid under the ULIP to either the MFs or eqyuities. And to top it all, he need not worry about paying the insurance premium every year and live under the constant fear that if the premium is not paid, the policy would get lapsed!!!
Again, in the case of ULIP, higher the value of your investment, lower the premium charges which is not the case with term plan. Here the premium remains constant thruout the period of insurance cover.
I agree, insurance is only a risk mitigating tool and should not be used for wealth creation. But when there is an opportunity to have the best of both the worlds, why not????
The article says "Term plans also prove inadequate if you lack the discipline or time to invest regularly, want to skip the trouble of researching investment vehicles", which is not fully true. If you lack disipline or time to invest regularly, even ULIPS cant help, because in ULIPs u invest every month, every quarter, etc, for years requiring discipline. In term policy there is no investment aspect involved. So where is the question of skipping investment vehicle ?. The author should note that disciple is required for ULIPs and skipping investmet vehicle, is a point to be used when comparing ULIP and other investments (not term insurance).
RE:A small correction (Author should note)
by arun kumar on Dec 07, 2007 04:21 PM Permalink
In most of the ULIPs, premium payment is mandatory only for the first three years. After 3 years, you can stop paying premiums and your insurance will be active as long as you dont surrender the policy
Dont take the LIC premiums .The agents are making money instead of insurer.The toplist insurance making money from insurer is LIC be aware of taking the primiums of these company
RE:LIC premiums
by Sathish N on Dec 07, 2007 02:48 PM Permalink
Both LIC and agent make money at the cost of their friends that they trap. Agents - please go get a real job instead of ripping off your friends and relatives.
