Bajaj Allianz has introduced a unit-linked life insurance plan called iGain. This policy available directly from Bajaj Allianz, it is easy to buy online and much simpler to understand the terms and conditions. Their website provides all the info with various charges on a yearly basis for individual premium amount, while purchasing the ULIP itself. This will make a big dent to Insurance agents pocket since their commission part is completely excluded from customers money. Also, this will ensure that the agents can no more mislead the customers with the policy information.
My take on this policy:
- Since iGAin is completely an online ULIP, it does not have an intermediary and hence you are the sole beneficiary.
- The allocation charge is 5% in first year, if the premium is between 5K to 25K. However, it will be 2% if premium is 25K-200K & zero above that. They are able to offer such low charges since there is no agent in between customer and the company.
- From the 11th year onwards, iGain increases the allocation of units by 2% to enhance your investments. So while you pay a 100% premium, 102% of it is invested.
- Due to all these benefits, if you calculate the effective allocation charge for a term of 20 years, we can say that policy has zero allocation charges.
- Now the question that comes to everyone’s mind is how are they able to offer iGain plan with very less initial premium allocation charge. The truth is in the administrative charge, which is very high that customer has to pay throughout the continuation tenure of the policy.
- The choice of top-ups is good. Customer has the flexibility to make an additional investment through a top-up, which is over and above regular premium payments. Top-up can be made at any time while the policy is in force with minimal charges.
- Unlimited switches are allowed. A switch will enable you to shift the existing units of your unit-linked policy into a new fund and will not change your future premium allocation.
- Good thing is they have made it very clear on their site that monthly administration charge is 0.5% of yearly premium with a min of Rs 50 and a max of Rs 100, this means you are spending around 5% of yearly premium just as administration charge, which is too high. Hence, the company is not really selling the policy cheap, but the fact is they are cashing in from the administrative charges :)
More information about this policy can be found on their site here. Though it looks to be an attractive option, SBI smart ULIP seem to provide the best possible NAV among the existing ULIPs. In this SBI Smart ULIP, NAV is guaranteed while the premium paying term is either 3 or 5 years.