You are regularly pitched an insurance product by your relationship manager or a sales agent. And nothing confuses you more. You are clueless about how to evaluate the product. There are fancy tables and illustrations. There are emotional “what-ifs.” The keywords like “bonuses” and “loyalty additions” give the impression that the insurance company is doing you a favour. … [Read more...] about Being sold an insurance product? How to figure out what’s being sold?
Unit linked insurance plan
LIC has launched two new ULIPs in March 2020, LIC Nivesh Plus (Plan 849) and LIC SIIP (LIC Systematic Investment Insurance Plan, Plan 852). LIC Nivesh Plus is a single premium ULIP and I reviewed the plan earlier in this post. On the other hand, LIC SIIP plan, it is a regular premium plan. As I see, the nomenclature has been chosen to ride the popularity of ULIPs. Though … [Read more...] about LIC SIIP Plan (852): Regular Premium ULIP from LIC: Should you invest?
The topic of this post may seem odd, given what I regularly write about ULIPs. I advocate mutual funds over unit-linked insurance plans (ULIPs) and for good reasons. I do not deny bias though. I wrote a detailed post comparing mutual funds and ULIPs and showing why I prefer mutual funds over ULIPs, despite ULIPs enjoying far superior tax treatment as compared to mutual … [Read more...] about How to select the Best ULIP (Unit Linked Insurance Plan) for your portfolio?
One big advantage that ULIPs have over equity mutual funds is that the maturity proceeds from ULIPs are exempt from tax. On the other hand, the long-term capital gains on the sale of equity mutual funds are taxed at 10%. LTCG on sale of debt mutual funds is taxed at 20% after indexation. In an earlier post, I highlighted why I still prefer mutual funds over ULIPs. I don’t deny … [Read more...] about If you are old, avoid 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)
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 problems … [Read more...] about Why you should avoid topping up your ULIP policy?