HDFC offering Infinia against investment - is it worth it?

[bvc19296]

To each his own. 1st he talked about some endowment plan which are very bad. Most of them give lower return than govt bonds & have high lock in period. 1.5lpa for 3yrs and surrender value is 6-6.5L? Seems like mis-selling.

As he was offered at 1lpa investment. I suggested ulip can be good. With that amount, additional rewards from infinnia can negate the opportunity loss of not investment in better instruments. If his expenses increase in future, then he can get more value out of it.

But considering his natural annual spend of 4-5lpa, taking 2.5LPA ulip policy( which rm generally asks) for paid infinnia wont make sense.

on the other hand ULIP can be good for those who are planning for insurance anyway. Someone who can spend atleast 8-10L can benefit from higher rewards rate.

Hope you @S S V Wont take it personally.

See Infinia or any credit card against ULIP or any insurance is most discussed topic and depends a lot on individual preferences and investments.

For cards like Infinia, Magnus, Axis Reserve, Amex Plat Charge or any other super premium cards for instance require high NRV and high spends to maximize it. May be close to 10L, these cards only suit to them. Don't take any cards just for rewards sake, Just maximize your spends and enjoy your rewards. We all have right to chose and discuss the right cards based on our individual preferences and spending patterns.

 

[SSV]

To each his own. 1st he talked about some endowment plan which are very bad. Most of them give lower return than govt bonds & have high lock in period. 1.5lpa for 3yrs and surrender value is 6-6.5L? Seems like mis-selling.

As he was offered at 1lpa investment. I suggested ulip can be good. With that amount, additional rewards from infinnia can negate the opportunity loss of not investment in better instruments. If his expenses increase in future, then he can get more value out of it.

But considering his natural annual spend of 4-5lpa, taking 2.5LPA ulip policy( which rm generally asks) for paid infinnia wont make sense.

on the other hand ULIP can be good for those who are planning for insurance anyway. Someone who can spend atleast 8-10L can benefit from higher rewards rate.

Hope you @S S V Wont take it personally.

I don’t take anything serious at all , as long as the subject was discussed…
and people should make their points consistently in the right direction while expressing their views….

In one post you said we don’t know what happens to Infinia after Infinia reserve was announced.. citing DCB devaluation…

In another post it’s okay to take with 1L ULIP…
If there is going to be devaluation in infinia why to take with 1L ULIP??
Or this devaluation risk only applies to infinia and it doesn’t apply to any other card we apply??

anyway, there is our lovely mate @amitr29 saying no matter what type of insurance investment we take there is always going to loss for the customer …
With these points taken into consideration, I think it is safe to say that no matter what ever is the investment amount on insurance policy taking Infinia against insurance is a loss making decision especially when Infinia is going to be devalued soon…

 

[amitr29]

I don’t take anything serious at all , as long as the subject was discussed…
and people should make their points consistently in the right direction while expressing their views….

In one post you said we don’t know what happens to Infinia after Infinia reserve was announced.. citing DCB devaluation…

In another post it’s okay to take with 1L ULIP…
If there is going to be devaluation in infinia why to take with 1L ULIP??
Or this devaluation risk only applies to infinia and it doesn’t apply to any other card we apply??

anyway, there is our lovely mate @amitr29 saying no matter what type of insurance investment we take there is always going to loss for the customer …
With these points taken into consideration, I think it is safe to say that no matter what ever is the investment amount on insurance policy taking Infinia against insurance is a loss making decision especially when Infinia is going to be devalued soon…

Have worked with Citi as Citigold RM for 7 years and sold lot of ULIP. Highest being 22 lacs a year ULIP. That time first year charges were 65% , second year 40% , Third year 20% and then 6% every year. Even after market almost going up by 4 times, ULIP never made profits or marginal. While MF gave 3x to 4x returns over 10-12 years.

Even today, after people are aware ULIP charges have done down but 10% upfront charge for Premium allocation is minimum and goes upto 50% and then1.35% every year as fund management charges. There is mortality charges also, for life cover, where life cover
miniscule.

To recover these charges, markets have to do expectionally well and higher returns are tough these days. So, after 3 years, you may just get initial investment and nothing else.

Why do you think banks are so desperate and die so much for ULIP. Because they make huge cut from the initial charges.

Hence, ULIP investment for credit card is not justified to best of my knowledge. There can be a case made, but that will be very subjective. What if market falls and after 3 years, you are sitting at negative 15-20% returns??

Further, a yearly commitment of certain high amount is not desirable. If you miss premium and go for policy surrender, there are heavy charges again.

Rather, keep 10 lacs balance across account and get Magnus Burgundy. You get at least 4% returns as interest and amazing benefits of Magnus Burgundy. Again, only if you spend justifies. How much you spend in a year is most important point.

 

[techt]

Have worked with Citi as Citigold RM for 7 years and sold lot of ULIP. Highest being 22 lacs a year ULIP. That time first year charges were 65% , second year 40% , Third year 20% and then 6% every year. Even after market almost going up by 4 times, ULIP never made profits or marginal. While MF gave 3x to 4x returns over 10-12 years.

Even today, after people are aware and hence Ulip charges have done down, 10% upfront charge is for Premium allocation is minimum and go upto 50% and then1.35% every year as fund management charges. There is mortality charges also, for life cover, where life cover
miniscule.

To recover these charges, markets have to do expectionally well and higher returns are tough these days. So, after 3 years, you may just get initial investment and nothing else.

Why do you think banks are so desperate and die so much for ULIP. Because they make huge cut from the initial charges.

Hence, ULIP investment for credit card is not justified to best of my knowledge. There can be a case made, but that will be very subjective. What if market falls and after 3 years, you are sitting at negative 15-20% returns??

Further, a yearly commitment of certain high amount is not desirable. If you miss premium and go for policy surrender, there are heavy charges again.

Rather, keep 10 lacs balance across account and get Magnus Burgundy. You get at least 4% returns as interest and amazing benefits of Magnus Burgundy. Again, only if you spend justifies. How much you spend in a year is most important point.

With this level of honesty do you still work in banks ?

 

[SSV]

Have worked with Citi as Citigold RM for 7 years and sold lot of ULIP. Highest being 22 lacs a year ULIP. That time first year charges were 65% , second year 40% , Third year 20% and then 6% every year. Even after market almost going up by 4 times, ULIP never made profits or marginal. While MF gave 3x to 4x returns over 10-12 years.

Even today, after people are aware and hence Ulip charges have done down, 10% upfront charge is for Premium allocation is minimum and go upto 50% and then1.35% every year as fund management charges. There is mortality charges also, for life cover, where life cover
miniscule.

To recover these charges, markets have to do expectionally well and higher returns are tough these days. So, after 3 years, you may just get initial investment and nothing else.

Why do you think banks are so desperate and die so much for ULIP. Because they make huge cut from the initial charges.

Hence, ULIP investment for credit card is not justified to best of my knowledge. There can be a case made, but that will be very subjective. What if market falls and after 3 years, you are sitting at negative 15-20% returns??

Further, a yearly commitment of certain high amount is not desirable. If you miss premium and go for policy surrender, there are heavy charges again.

Rather, keep 10 lacs balance across account and get Magnus Burgundy. You get at least 4% returns as interest and amazing benefits of Magnus Burgundy. Again, only if you spend justifies. How much you spend in a year is most important point.

Okay let’s stop thinking about CC against ULIP for sometime…

If ULIPs are consistently making losses for all investors for the last one decade why are they still exist in the market??
Is market that dumb??
Does any investment product exists in the market for such a long time which consistently every year give negative returns??
Just a basic question

 

[amitr29]

With this level of honesty do you still work in banks ?

No, left after I saw my clients suffer and the pressure bank was putting to sell or mis-sell this product. I moved to Forex and Trade Finance since 2012. Now doing my own advisory business for loans 😃

 

[sid16]

I don’t take anything serious at all , as long as the subject was discussed…
and people should make their points consistently in the right direction while expressing their views….

In one post you said we don’t know what happens to Infinia after Infinia reserve was announced.. citing DCB devaluation…

In another post it’s okay to take with 1L ULIP…
If there is going to be devaluation in infinia why to take with 1L ULIP??
Or this devaluation risk only applies to infinia and it doesn’t apply to any other card we apply??

anyway, there is our lovely mate @amitr29 saying no matter what type of insurance investment we take there is always going to loss for the customer …
With these points taken into consideration, I think it is safe to say that no matter what ever is the investment amount on insurance policy taking Infinia against insurance is a loss making decision especially when Infinia is going to be devalued soon…

The key point is also that ULIP is not mandatory for Infinia. In fact, selling ULIP to give Infinia is an unethical banking practice.

There is step by step devaluation of Infinia also happening all the time. I clearly remember, I used to get points for even tax payments on Infinia. Then that got removed. Then rent also got excluded. There used to be uncapped 10X returns. That got downgraded to 5X. Then returns also got capped. Recently, Accor miles conversion also devalued to half the value.

Most importantly, I feel Infinia has lost its shine in terms of rewards since a while. In the past few months, it's literally the last choice super premium card for me. I am using it ONLY for non-Amazon Pay Smartbuy vouchers and then maybe things like 1+1 ITC Buffet. Just not rewarding enough.

 

[amitr29]

Okay let’s stop thinking about CC against ULIP for sometime…

If ULIPs are consistently making losses for all investors for the last one decade why are they still exist in the market??
Is market that dumb??
Does any investment product exists in the market for more than a decade which consistently give negative returns??
Just a basic question

They haven't made losses because market has done extremely well. We have seen 30-40% returns in MF. I am talking about 2005 to 2012 period. If market is flat or goes up by 2-3%, Ulip will make losses. Ulip makes less profit than MF, as your Principal investment amount reduces due to heavy charges.

Imagine you pay premium of 2 lacs and only 80k gets invested. You are already 60% down. Most of the clients in ULIP get approx 2x less returns than MF. It's the RM who convince and sell

 

[techt]

No, left after I saw my clients suffer and the pressure bank was putting to sell or mis-sell this product. I moved to Forex and Trade Finance since 2012. Now doing my own advisory business for loans 😃

You are 'a mitr' to customers and 'amitr' to banks. Wholehearted appreciation from my side.
Dear Fintos, this is your guy for investments.

 

[amitr29]

You are 'a mitr' to customers and 'amitr' to banks. Wholehearted appreciation from my side.
Dear Fintos, this is your guy for investments.

Beleive you me, the pressure to sell ULIP is soooooo immense, it gets so frustrating everyday. Even if you do 2x of your revenue targets, if you don't do ULIP, you will be insulted every morning, afternoon, evening and night.

 

[techt]

Okay let’s stop thinking about CC against ULIP for sometime…

If ULIPs are consistently making losses for all investors for the last one decade why are they still exist in the market??
Is market that dumb??
Does any investment product exists in the market for such a long time which consistently every year give negative returns??
Just a basic question

Lie Sell and Dhoka by banks.
Ignorance : We are penny wise and pound foolish. Everytime someone says that after 10 years you get 40K permonth. People consider todays' 40K purchasing capacity. After 10 years, 40K is equivalent to some 10K or less.
80 C : Every one, even today will invest in March for the sake of saving in 80 C. Savings, Insurances and Investments are different. Putting all these 3 orthogonal things into 1 bucket, govt. made a trifrakata.

PS: A said by mitr, the pressure is so high to sell. Sell fibs and tie an ULIP around a bakara.

 

[SSV]

Beleive you me, the pressure to sell ULIP is soooooo immense, it gets so frustrating everyday. Even if you do 2x of your revenue targets, if you don't do ULIP, you will be insulted every morning, afternoon, evening and night.

Every job in this world have these kind of things.. especially so in the marketing and sales dept.
This is commercial world

 

[SSV]

The key point is also that ULIP is not mandatory for Infinia. In fact, selling ULIP to give Infinia is an unethical banking practice

No one here said ulip is pre-requisite to get Infinia..

 

[amitr29]

Lie Sell and Dhoka by banks.
Ignorance : We are penny wise and pound foolish. Everytime someone says that after 10 years you get 40K permonth. People consider todays' 40K purchasing capacity. After 10 years, 40K is equivalent to some 10K or less.
80 C : Every one, even today will invest in March for the sake of saving in 80 C. Savings, Insurances and Investments are different. Putting all these 3 orthogonal things into 1 bucket, govt. made a trifrakata.

PS: A said by mitr, the pressure is so high to sell. Sell fibs and tie an ULIP around a bakara.

Absolutely right 💯

 

[amitr29]

Every job in this world have these kind of things.. especially so in the marketing and sales dept.
This is commercial world

Except credit card guys, who have suddenly shot into high demand thanks to this community 😃 Otherwise, there was a time these credit card people used to line up outside offices and there were no takers

 

[SSV]

I am talking about 2005 to 2012 period.

So you are talking about , 12 to 19 years ago which is very long comparatively in this new economic world…

Imagine you pay premium of 2 lacs and only 80k gets invested.

In my plan the charges are 12%, 6%, 4%, 3% of the premium for the first 4 years …

I had already recovered more than 50% of my charges for the first year in 3 months and I will switch the funds based on the market conditions from high risk to bonds , and this is for unlimited times for free and hence beat the market

I will post performance my ULIP investment every year here as long as I am on this platform

 

[amitr29]

So you are talking about , 12 to 19 years ago which is very long comparatively in this new economic world…




In my plan the charges are 12%, 6%, 4%, 3% of the premium for the first year…

So, in first year you invested only 87 percent. If you consider compounding, you returns will be very low compared to MF. Second year 95% and then 95%.

It's not about returns but the initial amount invested. It's not they deduct these charges from profit, but initial investment. That makes the whole difference and where client is at loss

 

[amitr29]

So you are talking about , 12 to 19 years ago which is very long comparatively in this new economic world…

Yes, but that was the time market made most profit and just zoomed. Still Ulip made very less returns

 

[techt]

Except credit card guys, who have suddenly shot into high demand thanks to this community 😃 Otherwise, there was a time these credit card people used to line up outside offices and there were no takers

Arindam bhaja Govindam

 

[sidp]

Glad to know you don't take it seriously.
Everything depends on context. If someone wants to go offroad, I can't recommend them ferrari. Whether ferrari is good or bad, that would depend on the person.

And the explanation for each comment was in the comment you have quoted. Though now ulips aren't as bad as it used to be. Still it is a lower yield instrument. That case was specific, as amount quoted was much lower than average hence said ulip can be good. Considering how even mid cap Funds are doing over last few years. With current govt highly likely to get another term. low investment amount can be recovered.

If ULIPs are consistently making losses for all investors for the last one decade why are they still exist in the market??
Is market that dumb??

Well endowment funds are still active. Which will NEVER make you money.

people aren't rational. That's why they buy things that they can't afford. (Majority of iPhone buyers bought it on emi.)

Do you believe that the mass/market behave rationally? Look at the valuation of any start up with an app or ecom website. Ola/uber/Zomato/lenskart/flipkart (if we can even call them start up). When will they make consistent profit? Is their business model even allows them to? When will they recover the money they have already lost. Even with that kind of p/l look at how much they are paying their employees, even HRs who are objectively bad at their job.

Can paypal ever recover the loss it has made? And what is the appropriate discount rate? Considering high risk industry, big time lag between original investment and profit realization, all the disruption that has happened and about to happen in that industry I am looking at 30% yoy discount. I am doubtful they would ever recover the loss. Let alone making money for regular investor. And what is the valuation deemed fit by market?

Same with Tesla? Bigger than vw+honda+ford+suzuki+gm +..... isn't that a joke? What is the total no of cars they have sold since inception and no of cars each of these companies sell in a year? What will happen with a leadership change? When people realize ev are much worse than ICE for both environment and out pocket?

what happened to NFT? They shouldn't have survived that long also. Why SHOULD Luxury watch price increase as they get old and used?

If you expect rationality from mass, then you have much higher hope on people than me. Reading prof. Shiller and talking to him has helped me immensely. But sometimes it still comes out(like right now).We live in a country where criminal convicted of stealing public money, comes out on bail, do public rally where millions come to see him and then give his party highest vote and want him to again take control over public money. And later thet cry for development?

Most investors/traders lose money in share market. Still new batch of them comes each year. But you do you brother. We need some hopeful people.