Budget 2018 proposed long-term capital gains tax on equity investments. The very next day, the insurance companies were out with advertising campaigns highlighting the tax advantage of ULIPs over mutual funds. Well, mutual funds and ULIPs compete for investor money. And it is not unfair on the part of insurance companies to highlight any demonstrable advantage that they may … [Read more...] about With tax on LTCG on sale on equity mutual funds, do ULIPs make for a better investment choice?
LIC Jeevan Shiromani is a traditional money back plan. It has a flavor of both participating and non-participating life insurance plans. You get certain guaranteed benefits (known upfront) and certain benefits are linked to the investment performance of LIC. Let's look at some of the salient features of the plan and see if you should invest in such a plan. LIC Jeevan … [Read more...] about Review: LIC Jeevan Shiromani (Benefit, Features, Returns): Should you invest?
IRDA released its annual report for FY2017 in the first week of 2018. We have the claims settlement data for various life insurance companies for 2017-2018. Clearly, higher the claim settlement ratio, the better it is. However, as I had discussed in my post on claim settlement ratios for FY2016, the claim settlement data hides more than it reveals. Insurance companies … [Read more...] about IRDA Claim Settlement Ratio of Life Insurance Companies for FY2016-2017
You purchased a pension plan many years back. The plan is about to mature. You get a call from the insurance agent/salesperson that you can use the pension plan proceeds to purchase a Unit Linked Insurance plan. What will you do? I have received quite a few similar queries over the last few months. Perhaps, this always used to happen. Just that I got aware because of the … [Read more...] about Maturing Pension plans and purchasing new ULIPs
When we talk about Unit Linked Insurance Plans (ULIPs), the detractors point to higher charges that lead to lower returns. On the other hand, the proponents point to the favourable low-cost structure that came into existence after IRDA revised Unit Linked Regulations, 2010. Both seem to have a valid point. Higher charges do eat into the returns. On the other hand, the new-age … [Read more...] about In a ULIP, you pay more for the same life cover as compared to a Term plan (Mortality charges)
Term life insurance is the best way to purchase life insurance. However, many stay away from term life insurance plans because they (or their family) do not get anything if they survive the policy term. What if there was a term plan where you will never be able to survive the policy term? Don’t worry the insurance company won’t hunt you down. They are insurers, not assassins. … [Read more...] about Will you a purchase a Term Plan that provides you Life Cover for your entire life?
LIC has come out with a new packaging. The reason I say this is that the product is not too different from older ones but comes with a new name. The plan was launched early September 2017 and will be available for 270 days from the date of launch. Why? I have no clue. In my opinion, it is a marketing gimmick. Scarcity may shore up demand. As I have mentioned before, I have … [Read more...] about Stay away from LIC Jeevan Utkarsh
A top-up premium is an investment that you make in your ULIP (Unit Linked Insurance Plan) over and above your contracted premium. There is no compulsion to make such an investment. If you are paying top-up premium, you are paying it of your own free will. In this post, let’s look at why you should avoid topping up your Unit-Linked Insurance Plan (ULIPs). What are the … [Read more...] about Here is why you should avoid topping up your ULIP policy?
Yes, your age at the time of purchase affects the return that you earn in investment and insurance combo products such as traditional life insurance plans and ULIPs. Everything else being same, lower the age at the time of purchase, better will be your returns. It is best to understand this with the help of examples. Let’s first start with a traditional plan. How your age … [Read more...] about With Traditional Life Insurance plans and ULIPs, your Age affects the returns
Is IRDA trying to solve a wrong problem? Recently, I read excerpts of a speech from an IRDA member at a summit organized by CII in an article. I will copy a portion of the article below. //////////////////////////////////////////////////////////////////////////////////////// India is one of the lowest commission paying countries in the world, said Nilesh Sathe, Member … [Read more...] about The Bizarre Commission logic by IRDA