A detailed comparison of ULIPs

UlipsMany of the ULIP information seekers have been asking for a comparative article on the existing ULIPs with Guaranteed NAV in the market. In this article you will find the most comprehensive comparison of Unit Linked Insurance Plans offered by various insurers like LIC, SBI Life, Birla SunLife, Bajaj Allianz, Reliance and ICICI Prudential. One of my blog reader Sumanth has been kind enough to do all the preliminary investigation to gather the information provided in this article, many thanks to him.

InsurerLICSBI LifeBirla SunlifeAllianz BajajReliance LifeICICI Pru
ULIPWealth PlusSmart ULIPPlatinum PremierMax GainNAV GuaranteePinnacle
Entry Age10-65 Yrs8-60 Yrs8-70 Yrs8-60 Yrs30 days to 658-65 Yrs
Term8 Yrs10 Yrs10 Yrs10 Yrs10 Yrs10 Yrs
PPTSingle or 33 or 5107Single or 103
Maturity Age73 Yrs70 Yrs80 Yrs70 Yrs75 Yrs75 Yrs
ModeSingle, Yly, Hly,
Qly, ECS Monthly
Yly, Hly, QLY,
ECS Monthly
Yly, Hly, ECS Qly,
ECS Monthly
Yly, Hly, QLY,
ECS Monthly
Single,
Annual
Annual
Risk CoverSP 1.25-5 Times;
Annual 5-10 Times
5 Times of
Annual
Premium
5 Times of
Annual
Premium
5 Times of
Annual
Premium
SP 1.1-6 Times;
Annual 5 – 30
Times
5 Times of
Annual
Premium
Death
Cover
SA + Fund
Value
SA or Bid
Value
SA or Bid
Value
SA or Fund ValueSA + Fund ValueSA or Fund
Value
Extended
Cover
YesNoNoNoNoNo
DABYes-No-RidersNo
PremiumSP 40000;
Yly 20000
Hly 10000
Qly 5000
ECS 2000
Yly 50000 Hly
25000 Qly
15000 ECS
Yly 25000
Hly 15000
ECS, Qly 7500
Mly 5000
Yly 25000
Hly 15000
Qly 8000
ECS 3000
SP 30000;
Annualised
Premium
20000
50000 PA
Fund TypeOne – Wealth
Plus Fund
TwoTen – only 1 is
guaranteed
OneOneOne
NAV Guarantee7 Yr, Term End7 Yr 2 Dates7Y3M, Term EndFullFull7 Yrs
Allocation
Charges
[1st Year]
11.25-12.00%15%10%15.00-
20.00%
20%14%
Allocation
Charges
[Later]
2.50% for PPT5% for PPT5% for PPT3.00-6.00%3% (2,3)
2% (4,5)
1%
4% (2)
2% (3)
Allocation
Charges
[SP]
4.00-4.50%NANANA2%NA
Partial
Withdraw
3 Yrs5 Yrs3 Yrs3 Yrs3 Yrs3 Yrs
Surrender3 Yrs3 Yrs3 Yrs3 Yrs3 Yrs3 Yrs
Surrender
Charges
NIL3rd Yr 9%
4th Yr 2%
5th Yr Nil
Within
3 Yr 40% 4 Yr 20%
5 Yr 10%
Within
3 Yr 20% 4
Yr 10%
Applicable,
No mention in
brochure
3rd Yr 4%
4th Yr 2%
5th Yr NIL
Policy
Admn
Charge
1st Yr 60 PM;
2nd Yr 25 PM
Escalation @
3%
Flat 60 PM +
INR 5 per
thousand SA
(3 Yr)
0.24% PM of first
25000 and 0.40% of
annual premium (3
Yr)
1.26% of
First Year
SA
40 PM (thru)0.40-0.60% of
Annual
Premium PM for
3 Yrs
FMC1%1%1.5%1.25%1.35%1.35%
Guarantee
Charges
0.35%0.5%Included in FMC0.25%0.15%0.10%

Peak NAV Guarantee ULIP : Illustration of charges for the first 3 years:
For illustrative calculation, the following are considered:
Mode – Yearly premium; Premium – 1 Lac; Sum Assured 5 Lac;

ULIPWealth
Plus
Smart
ULIP
Platinum
Premier
Max
Gain
NAV
Guarantee
Pinnacle
1st Yr Alloc
Charge
120001500010000200002000014000
Policy Admn
Charges
720720+250060+400
PM
63004804800 OR
7200 PM
Total 1st Year127201822015520263002048018800
2nd Yr Alloc
Charge
250050005000600030004000
Total 2nd Year28008320105201230034808800
3rd Yr Alloc
Charge
250050005000030002000
Total 3rd Year2800832010520630034806800
TOTAL IN 3
YEARS
183203486036560449002744034400
Total 3 Yr
Premium
3 Lac3 Lac3 Lac3 Lac3 Lac3 Lac
Allocated
(nearest 000)
2.82 lac2.65 lac2.63 lac2.55 lac2.73 lac2.66 lac
Surrender
Charges
NilYesYesNilYesYes

Disclaimer : This comparison is arrived at by going through various ULIP plans as provided by each of the insurer on their respective product at the time of publishing. Readers are suggested to check their respective sites/brochures for more detailed information, publisher doesn’t bear any responsibility for misrepresentation if any on the data provided.

Comments

  1. dr.bireswar saha says:

    i took up a reliance highest NAV guarented plan 3 yr back with premiun of 1 lac per yr.policy no 16622333 . now that i have paid 3 premium in my fund only 280445 is present, i want your opinion taht should i continue my premiun or should is continue my policy without paying futher premiun ,i was told that minimum of 3 premium should be paid. pls give me ur opnion
    thanking you
    dr.bireswar saha

  2. I have buy smart performer plan from sbi life insurance what benefits we got through this plans after 5 years plz suggest me for more beneficial plans in money growth not risk cover plan and compare between ulip and mutual funds which one is more beneficiary.

  3. Dear sir

    I had recently took ICICI pinnacle super plan by seeing the tempting projections..but later came to know the market by seeing in some site and thought mutual funds are best than ULIPs.. sir kindly suggest me is this the best plan to continue or to cancel it… Plz guide me…

    Thank u so much
    Dhanunjay

    • Hi Dhanunjay
      Can you pls explain how ICICI Pinnacle Super plan charges you. What is the allocated premium. I was thinking pinnacle super is a good one when compared to similar one from birla.

      Thanks
      Suresh

  4. hi, please compare the lic ulip, birla ulip and icici ulip? please explain it on table. thanks

  5. Varun gupta says:

    Hi,
    I want to invest 10 lac in period of 20 yrs or so. i have gone through LIC JEEVAN ANAND, ICICI PURE PROTECT & ICICI UPLI’S. Can you suggest me where should invest & where can i get the maximum returns? I want to be insured as well. But there is no exit in LIC jeevan anand without sacrificing my some money if i want to at later stage. Please suggest me wherew should i invest. If any other plan is better than these then please suggest me thatas well.

    Regards

    Varun Gupta

  6. Natarajan says:

    Hi,

    Nice comparsion but it’s not covering the new plans like Foresight….

  7. Nice comparison of Insurance products here Mohan! Does this still holds good?

  8. Natarajan says:

    hi,

    I’m planning to invest ULIP plan in Birla sunlife.(foresight plan).
    In this Maturity amount will be = lowest NAV + differnce of Annual and Highest NAV

    Please guide me to proceed this plan.

    • foresight plan is a scam plan, never buy that, you will end up haning yourself, worst inverstment, all money laundring people

  9. Hi, Mohan – give the list of best performing ULIPs and Best return giving com

  10. I have the following LIC ULIP policies:-

    Premium 20K/pa (plan 180 Type growth Term 5).
    Premium 20K/pa (plan 180 Type growth Term 12).

    This policy is not performing very good. The NAV value is Rs. 11.8 as of now and so far we have got approximately 7000 units in last 4 years so technically we have earned only approx. Rs. 3000. In such a situation, will it be a good idea to surrender it and invest in new ULIP policy?

    If I surrender it now, then how much money will I get?

    • srinivasu says:

      if 3 policy years compleated you may surrender,but ask for a PAID UP option by signing a form in the lic office where policy is taken.
      do not go for any ulip even today.
      in case you have dependents take a term plan at low cost and invest in any good shares like NTPC, ONGC,BHEL, POWERGRID, L T, SBI etc..for long term.
      ulips works in favour of customers only after paying premiums for 10 years and more…
      Better stay away from ulips, as they are difficult to understand…
      thanks for this good work.

  11. Dear Mohan,

    NICE to see the comparison on your blog. I am the original creater of the same and I am happy that it was useful for some one.

    I am currently in Patna and it remains a passion to compile & create such comparisons, analyses, presentations etc in the domain of life insurance solutions.

    Regards
    Kulbhsushan

    • jayasimhan says:

      dear kulabhusushan

      if you have such comparisons and analysis presentations on ulip if you can share or inform the link it will be useful for my cousin’s presentation in his mba.

      regards
      jcman

  12. Lakshminarasimhan says:

    Dear Mohan,

    Last year, I have invested in SBI Smart Ulip Series II. Total 3 premimum to be paid and 5lac each. 1st year I have already paid. After having heard about the SEBI ban on ULIP’s, not sure whether should I continue with the next premium….! What would be your advice? Maturity period is 10yrs., can someone give me a valid suggesition at this stage as my first year is nearing completion. My parents are suggesting to advice SBI to consider the first year premium for entire three premium. Is it wise suggestion, is it possible…!!! What is your view & suggestion to me.

    Thanks for this blog, very useful and informative. But am stuck and unable to decide on my way forward.

    Your valuable suggestion & advice, on this is much appreciated.

    • Dear Lakshminarasimhan, since you have already paid a premium, not sure about the exit charges involved if you withdraw. I suggest you to evaluate other options as well along with the one you have mentioned in your comment. Then compare and contrast pros and cons. You will be the best person to take a call after evaluating all the options.

  13. guys….one thing is for sure ….the nav of most pvt co. are bungled….learnt it from my experience….worst is bajaj allianz…avoid this co. their employees treat you like a prince when you are looking to get insured and snub you when you go for a claim …..their employees are more sarkari than the LIC which we curse…infact im impressed with LIC.
    great committment and honesty ….beware govt. companies play by rules …these pvt firms are sharks….always eager to rob you of your hard earned money !

  14. plz help me to choose the which company’s NAV Guarantee plan is useful. Mainly SBI, HDFC SL CREST and Bajaj Allianz. PLZ compare these three and help me to choose a best one. If these are not useful, tell me which one will be helpful

  15. satish B T says:

    Dear Mohan,

    That is excellent comparison.
    I have SBI Life Smart ULIP. I have paid the premium for the second year.
    In the unit statement I see Number of units allocted – For Flexi Protect fund 4211 Units and Money market fund 5794 units.
    Is switching allowed between funds ? I want to invest (switch to ) in fund which is more equity oriented , is it Money market fund ? Request your help.
    thanks in advance.
    Satish

    • Pradeep Shah says:

      Dear Mohan,
      I read your blog its really good. I had invested Rs. 50000/- in sbi smart ulip on 25-03-2010. can you tell me how much i will get or sbi life will deduct all the money through charges.

  16. dear all,
    wellcome.
    if any life insurance agent comes to u for a ulip sale next time do not ask him about past fund performance instead ask him to show one atleast policy holders annual statement of similar ulip, having minium 5 years premium paid.
    he wiii not come again.
    thanks ps… any reader of this can use this weapon !

  17. satyabrata biswal says:

    how i know my premium dues

  18. Hi Mohan, I want to invest 50~60K amount on my son’s name for long term. Can u suggest any plan which do exists and gives best of benifits to me & not to the companies as admin / allocation charges etc. Waiting for ur reply. Thanks, Vasudeo

  19. Great article…. thanks a lot for all your efforts

  20. Ramkiran says:

    Hi Mohan,
    what’s ur feedback on ICICI ACE ULIP? It’s one of the cheapest ULIP. they charge Rs60/- month Admin charges and max 1.35 Fund Management charges. Equity MFs charge max 2.5% Fund Management charges. If your fund size increases, the admin charges are covered by the difference of FM charges.
    Following website had comparison of ACE with MF which shows ACE is better. Did I/they miss anything in calculation? However, one catch is that ACE doesn’t have performance record.

    Also, can you give more insight into different portfolio strategies being offered by different ULIPs (Tigger and Fixed strategies from ACE)?
    Thx,
    Ramkiran

  21. Dr.John.K.C says:

    Dear Mohan,
    Good work on the comparison of Highest NAV schemes of various companies.
    Keep it up.Readers don’t get confused with Highest NAV & Highest returns.
    Highest NAVs work on a principle of diminishing exposure to equity funds as the term approaches.Initially they will put your money in equities,but slowly slowly to debt funds.You should see the charges too, HIGHEST allocation charges(than other ULIPs) for these highest HAV schemes,other charges are FM charges,Policy Administration charges,Highest NAV charges etc…
    These companies have not mentioned in the brochure HOW much money will be diverted to equity,how much to debt!!!!! That is the secret.
    If you go through the brochure it is written 0-100%. That means they can put any amount of money to any funds either equity or debt

    • Vinod Thomas says:

      Hai Dr.Hohn,
      You said it right.
      Without seeing the charges,Why should we go behind returns?
      All these companies are cheating people through seemingly GOOD schemes.
      They want money for their survival, for that they present new schemes in the society with HIDDEN & UNKNOWN llop holes.
      Vinod

  22. I want to take allianz bajaj igain2 ulip. Is it best or not? ya phir kisi aur ulip plan ke baare main batayen jis main high return mil sakh.

  23. Mohan,

    I was searching the blog for any retirement plans related items. However, didn’t find one.

    I did some analysis, however the current ones in the market seem to be all ULIP plans. So, I was wondering why should i go for an ULIP linked one, as I might be getting better returns in MFs. And my expectation was to have a retirement plan, that would give me annuity returns and would act as my pension plan. Interestingly. no one seems to be offering a scheme that would give an assured annuity returns.

    I am not sure whether its because i didn’t do a proper research, and i thought of posting an entry in this blog, to hear from experts.

    Regards,
    Dinesh

  24. Shekhar Bandaru says:

    Hi Mohan,

    That was a very good comparison.
    I am looking for a good long term/retirement plan.
    I don’t need insurance as I decided to take term insurance from Aegon Religare iTerm.
    One ICICI Pru guy is behind me, suggesting ICICI Pru Life Stage Pension Advantage.
    What is your opinion on it.
    My requirement is purely long-term investment without Insurance.
    I’m already investing 3000 SIP in Canara Robeco Tax Saver mutual fund.
    What alternatives I can think of?

    Thanks,
    Shekhar.

  25. I had seen ur comparison for ULIP’s this is very interesting but i had read it later & i had invested 2 lacs in LIC wealth plus, my requirement is to invest for my childrens future atleast a handsom amount after 10 years, so as i had invested what expected maximum return after 8years ? any other plans if u can suggest me for investment , as i can invest in equities also but i prefer atleast some surity of 50% wealth creation over period of 8-10 yrs.

  26. Hi

    Fantastic analysis.having analysed the market so much would you suggest an profitable investement for a small investor like me who is more bothered about the surety in returns.

    • Devi, feel free to go through some of the finance related articles on this blog, you should be able to find an apt product for you along with some wise planning :)

  27. Hi Mohan,

    Nice comparison. But I will like to add one critical thing you have missed. Two things decide whenther a ULIP is good or bad – charges and returns. At the time of buying what you know is the charges but what you do not know that what will be the return you will get. So when you compare you have to take both the perspectives.

    These highest guaranteed plans are based on a strategy called CPPI and trust me though all these funds will follow the same strategy they will give very different returns. That is because different fund managers will take different assumptions and based on those the fund will perform.

    One more problem of these funds is the de-leveraging risk. This simply means that all your funds will get locked in debt. Once this happens your fund will never be allocated to equity again and your returns will be really low. This de-leveraging can happen at any point of time. If this happens in the first 2-3 years than no point continuing with th epolicy.

    In my professional life, I have worked extensively on these kind of strutured products and my honest suggestion is to stay away from these products. Though they are good, they come with lots of risk.

    That is why SEBI has not allowed any fund house in Indian to launch such products and this has been one of the reasons of the recent fight between SEBI and IRDA.

    • Thanks! Appreciate for sharing your thoughts. Good to have you here to share your experience.

      • Hi, Mr. Mohan
        you have done a good job, nice comparison….
        May almighty Allah bless you and accept your hard efforts.
        please keep it up….
        thanks a lot

    • yes, every word is true.
      I am also in sales/ distribution side of these ulips. VERY difficult to understand due to non availbility of fund portifolio.
      thanks for this service.

  28. Hi Sir,
    Thanks a lot for these comparison….it helped me lot in my project.
    Can plz tell me…how can be compare the insurance company on the basis of the NAV they guarantee.

  29. Hi Mr Mohan

    You would have come across the recent news about SEBI banning 14 Insurance companies from issuing ULIPs and IRDA defying SEBI’s ruling. What is your take on this? What would be the implication of existing ULIPs and new ones which are being issued. Thanks.

    • Kamesh, both IRDA and SEBI have run over a thin line of unclear area through these ULIPs. There has to be strict guidelines on what falls under which and how to sort out issues like these when similar incidents happen in future. I am sure, both the regulators will sort out these things with the intervention of finance ministry if required since 70% of the money flowing into insurance segment is coming through ULIPs off late.

  30. srinivasu says:

    dear all !
    thanks very much for the service,
    welcome to the board.
    kindly remember low risk low returns, volatility in equity markets are really very good opportunities for traders and fund managers.
    but in case of above polices your hard earned money in most of the time PARKED in debt funds only.
    if you can wait for 7 years, equity exposure is the only best option for good returns.
    Always your first life insurance policy MUST be a pure term plan only.
    ulips in the first 3 policy years are useful ONLY for the agents/ companies.
    thanks

  31. Nice comparison!!!!
    But bottomline is one should never never never go for ULIPs. They are really costly in nature from investment perspective, however, they are very good from insurance company and agent’s perspective.
    ULIPs are making insurance companies and agents richer but fact is Investors are the biggest looser in it. Even IRDA supports misselling and malpractices in ULIPs as they are charging heavy licence fees to insurance companies. SEBI finally gave up and commented that ULIPs are come under IRDA so we can’t intervene. Now its upto the investor to avoid such marketing gimmicks like highest NAV.

    • That is the whole point of bringing in this comparison. So that people get to understand the intrinsic details of various plans. Well, the SEBI and IRDA are already fighting it over… you must have read this in the news since yesterday :)

  32. There are are so many ‘between the lines’ ‘in fine print’…’in finer print’ ‘in invisible ink’…written all over these investments…LOL!
    you have done a good job analyzing for the reader of your blog!…way to go!!!

  33. Aboslute right words at the end and very nice to know that you are ok with what i said too.

    I would have wished that the late husband had a higher cover plan, then the family would have been much more relieved. but if the lady is illiterate then would it be prudent to push her into ULIPs and give her a shock of life in case the account value turns negative.

    My take on all this now is: opt for a ULIP which offers you an enhanced cover. It can be of any company,but the mortality has to be cheaper.

    Let me quote an e.g. which might help others to understand and debate too:

    age: 31, male Life, annual Income: 4 lacs, marital status: committed, dependents: parents,annual premium:25k, Policy type: Whole Life ULIP,Premium Paying Term: 29 yrs, Sum assured(Basic Sum assuredplus enhanced sum assured):25 lacs(though i had recommended 50 lacs). While I have taken the e.g. from BSLI’s dream retirement plan, readers are free to use this kind of combination from any of the 23 companies.

    Mythoughts on the same:
    1.Life Insurance/High Coverage:

    client gets a life cover upto age 99, mortality charge is very less, Rs 4180 in this case. So this is better than term plan in both charges as well as coverage tenure.
    2. Mutual Funds:
    In case client wants to invest in MF’s,then the clients can invest in the same policy as a top up without bothering to keep a track of another new policies. I recommend clients to invest atleast 500 rs in top up. Got your bonus- add your top up account with 10-25% of your bonus.

    Whenever you are in financial crisis,just withdraw money from top ups and pay your premium.(this is possible after 3 yrs of continous investments.
    3. Flexibility of Premium Paying Term:
    Client can pay upto whatever tenure he feels comfortable(Min tenure is 3 yrs), policy coverage will continue till whatever period his account value supports the charges.
    4. Pension:
    Clients can withdraw required amounts from their account value as and when they require. assume that they would require regular income after their retirement. No tension of thinking about annuities etc.
    5. Dual Tax Benefits as per current tax rules and taxation is a matter of solicitation.

    So this one plan would work as a combination of :

    Term Plan, Whole Life Plan, Investment in Mkt, Pension plan in a way. Undoubtedly the best tax planning tool with all the needs fulfilled.

    I need views on this as it would help me to grow in my field

  34. S. Balasubramanian says:

    Dear Mr. Jayant,
    Yes,you are right. i am not taking it personally. let me tell you one thing if it is only for my bread and butter i can sell any thing. the example which i have quoted is an investment made by a policy holder with the husbands death claim..she (policy holder) left to my choice to invest to benefit her children.. with this responsibility on my shoulder i chose that particular policy. Insurance and investment are two different categories..that uneducated village lady cannot go to a share broker and invest her money. that was the reason i mixed the both. as a personal example, in that same period i invested in share market directly and gained only a minimum amount. As you know investment is a long term process many people think it in other way. But my suggestion is that, if you do not have appetite to take risk.. invest your amount for at least eight years..i m sure, you will get your maximum.

  35. Dear Mr. Bala,

    That is the problem of Sales persons in our country. Ofcourse,that is your bread and butter so some bit of it is expected but atleast you must give some education to new comers. Not even once you told them that performance ULIPs are highly unpredictable. Past performance is not an indication of future returns. Even your company mentions this so why not practice the same.
    A true sales person would have given indication that amounts invested in ULIPs went down in recession period too. If would have helped all of us if you would have explained more about the strong investment pattern,how it works etc. Dont take it personally, but we all mean business,some sell,some buy. So those who are in this field should educate for long term benefits.

    Dear LAvi,

    Dont go by figures alone, these statistians give big nos which are beyond understanding of many. Go by basics, where the companies are investing, read fine prints however tedious it may appear. slight correction i would like to make in bala’s statements: it is not greek or latin..it is ur own welfare…it is your own hard earned money…so it is your own responsibility where to invest…so invest after careful evaluation. But yes, do it fast(not in hurry)..there are 23 companies and many more to come..so more chances of getting confused.

  36. S. Balasubramanian says:

    Dear Milind & Lavi,
    I am a development officer with LIC. I can clear doubts regarding your investment in ULIPs. Further i can also recommend you the ULIP plan Profit Plus which has the strong investment pattern. A policy holder who has invested Rs 50,000/- on November 2008 his fund value today is worth Rs 72,751/- Is it not a good return? I leave you to calculate the percentage of return what you get…in other words profit of Rs. 22,751/- in just 1 year and 4 months for Rs 50,000/- Dear Lavi, it is not greek or latin….it is your welfare and…. it is our responsibility.

    • S. Balasubramanian,

      50,000/- becomes 72.751/- only? What a bad return by LIC Profit Plus?

      If someone would have invested 50,000/- in 03 Nov 08 in Reliance Growth @ NAV 226.9026, now on 01 Apr 10, it is 97,775/- (NAV on 01 Apr,10 is 443.7109).

      LIC is the worst performing in equity.

  37. I wanted to learn all these for quiet some time now.. trying to learn too..But seriously speaking, some of these looks like Greek and Latin for me.. Long way for me to go.. But everything is neatly described. Ppl who knows abt this better will find it more informative.

  38. Capt Ashraf A Mullaji says:

    Thanks for the comparison and all the efforts by everyone involved well appreciated and commendable.
    Keep up the good work.

  39. Milind Kulkarni says:

    Mohan – thanks great comparison !

    I have always been a little reluctant when it comes to mixing insurance and investment. I see two grey areas that need to be addressed about these plans.

    No insurance company is really saying on guaranteeing the actual returns. What they say is about the highest NAV. Theoretically it means that investor may have to redeem at same NAV (Rs 10) he invested his amount at. So if we consider Lic’s example above, it means that person may have to be satisfied with just 2.82 lacs at the time of maturity. He invested 3 lacs though :-(

    Trying to be realistic a little, equity markets over a period of 8 years are sure to appreciate, if we go by India’s growth story :-). And here is my question
    What is equity and debt exposure of the invested amount ? Considering equity exposure, there are open questions below.

    Grey area -1
    For e.g. I invest 1000 rupees and considering fund manager invests the whole amount in RIL @ 1000 (1 unit considering zero charge). This stock price becomes 1500 after one year and comes back to 1200. What insurance companies are claiming is they are going to give the investor 1500 (when actually they will only get 1200 current price from exchange). How on earth can they do this ? NAV calculation is the key for the success of such investment plans. I dont know whether IRDA has taken enough measures to ensure transparency of NAV calculation of these plans.

    Grey area -2
    Finally Just trying to understand on illustration, I learnt from an agent that now insurance company can be forced to sign the illustration when investing. Later this can be used by the investor if he was misguided. I am not sure whether this information is authentic. What is IRDA’s mandate on illustration ?

    These are two grey areas(open questions) and I am still discouraged to invest in these plans. This article discouraged me further.

    • Milind, here is my thought on the points you have raised:
      1. IRDA does have a clear guideline on how NAV should be calculated. I am sure, it does monitor the various policies offered by insurance companies on a periodic basis. Also, the insurance companies are mandated to submit reports from time to time.
      2. Sorry, I dont’ have any information on that illustration as proof. May be someone out here can answer that for the benefit of all.

    • Sorry, Mohan Could not resist myself from poking my nose. :)

      It is mandatory to sign Benefit Illustrations for ULIPs. Benefit Illustrations give a clear picture of all break ups of charges and benefits that a customer would get after purchasing the product. It all began after agents started promising whimsical returns and fancies. Like pay only for 3 years, get returns of over 100% per year etc etc…..
      It is mandatory that Illustration show a clear idea of Guaranteed and Non Guaranteed returns.
      It gives an idea of what is the premium paying term, sum assured,which fund u r opting, various charges involved etc.
      It is mandatory that the illustration given shows 2 alternatives in terms of returns: 1. Returns with 6% per annum 2. Returns with 10% per annum.

      If any agent shows any illustration above this, then it is not Company Generated illustration. There is a loop hole in the illustration system. It is of 2 pages wherein the customer is supposed to sign on the second page. So It is easy to show you inflated amounts,take sign on second page,then attach the original one back again. IRDA should make it mandatory to sign on all pages.

      Till date, the companies are not telling customers where their money would be invested unlike mutual funds. If this is made compulsory by IRDA then it would mean real business transparency for the companies.

  40. Mitesh Pathak says:

    Hi Mohan,

    Thanks for putting this detailed yet easy to understand comparison.

    I suppose TATA AIG is missed out. They do have a Higehest NAV Gauranteed Plan – Invest Assure Apex Plus. Please share your views on same.

    Thanks
    Mitesh Pathak

    • Hi Mitesh, glad this article was useful to you. I haven’t looked at TATA AIG’s NAV guarantee plan. Let me go through it sometime soon and post my thoughts here. To stay tuned with the new articles on this blog, pls do subscribe for email notifications.

  41. k.k. bhargava says:

    i invested in sbi smart ulip 65 % gross 45% net return i. see lic is a gov. org, having very big infra ,offices, officers,big no.s of employees corelation strikes, babu working stlye kal aana parso aana, 2 hrs lunchtime 1 hr tea coming 2 off 11 o clock , leaving 4 o clock salary hrs based, hefty commi to agents so they single aim is for earning themself certainly not 4 investors.aapa number sabse bad me aata hai. inse basic insurance lo and invest in mf, fd,equity aur lena hi hai to sbi life se lo. 1 office of sbilife = 1 bm, 1 officeboy, 1 logor, 1 cashier bus ho gaya 100% work culture.

    • Dear Bhargava, LIC has to change with time otherwise they will go down with the stiff competition from other players in the industry. Nobody can take things for granted. See what happened to BSNL… I am sure some brains @ LIC too will be thinking on those lines to better their services.

  42. Hi Mr Mohan

    Thanks a lot for your analysis. I was just about to make some decisions on these and your information was timely. I take your advise on not combining investment with insurance – something which has been my policy too. But I would like to invest in some pension plans. Have you made any analysis on the various pension plans (without life cover) available in the market pl?

    Thanks

    • You are most welcome Kamesh. Do you have any specific pension plans in mind? I haven’t reviewed any such pension plans on this blog yet. I will start on those soon.

  43. Hi all.
    From the above analysis i am not able to figure out which one to go for. I am very new to such investements. So can i go for LIC wealth plus or not since the offer is going to close by march 31.

  44. deepak kumar says:

    Good work Mr.Mohan and Sumanth for giving such good insights abt the investment instruments and for contributing your time in educating the ppl in ur style.In the above table of comparison between NAV guaranteed Ulips. The allocation charges for 3 year PPT table shows as LIC is charging less.But if u study the LIC wealth plus document it is given that the charges are collected @ 2.50% throughout the policy term of 8 years.so it works out be more charges when compared to other plans because after three years the charge 2.50% is for the entire investment and any ulip main concept is to give more returns on invesment.But LIC market plus is also a similar kind of ulip with no NAV guarantee and the returns of this product are very low. when the company is not guaranteeing the NAV still it is unable to perform .wt abt if it Gaurantess!!!!
    when we look at SBI Life smart Ulip the allocation charges are only for the 3 years PPT and if we look at returns Series-I issue price @ 10/-@ jan2009 has given 65% growth with in 1 year and the series-II issue price@10/-@jan2010 with in 2 months higest NAV is 11.10/-@10% growth and it is a open ended scheme(LIC weaith plus is open till april-2010) .Even if u buy the units @ current NAVi.e 10.75/- on 25-03-2010 ur investment value will be showing u @11.10/- per unit were ur worry abt the charges can be recovered . Finally as they are locking the NAVs on only 2 days in a month i.e on 8th and 23rd of every month they manage to give the better returns than the other Daily highest NAV Guaranteed ulips which doesn’t give the fund manager to take a risk of giving more returns i.e they may invest only in safe returns instruments related to money market and Debt market were risk is low and growth is almost dead slow.So Investors before making any investment please try to do the technical analysis of the products and think logically.

    • Hi Deepak, Thanks for sharing your thoughts. I do agree with your view and the way to look at various policies. Infact that 2.5% pa is charged against the fund value after PPT. So the net fund value heads for lesser allocation as each year progresses. Though the numbers look rosy in favor of LIC for first 3 years, if we consider the full term, another 12,500 would have been deducted.

      That is one of the reasons why I am not in favor of combining investment with insurance through these ULIPs.

  45. Fantastic comparison of various Guaranteed NAV ulips in one article Mohan! Keep more of such comparative articles coming. This gives us a wider spectrum of the market and to choose the best product.

  46. I hv the ones from Metlife and ING Vysya. Hv heard a lot of +ve reviews abt Bajaj Allianz though!

  47. Mohan garu
    excellent job…..and very detailed explanation. Keep up the good work. All the very best.

    Manish: The above ULIPs were compared because they are claiming the “Highest NAV guarantee” plans.

  48. nice detailed comparision :)

    But on what basis did you choose these companies ? There are many other companies also I guess ? No ?

    manish

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