You are getting a 7% expected return on a market linked product you can get same or better guaranteed returns in FD without any risks
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panchabhut
TF Ace
As per Max life site, 1 cr cover for 20 years for a 29 year old male, having annual income of >10L and 10th pass, gives annual premium of 11531 incl GST.
The remaining amt out of 10 L premium is 9.88 L. If its invested even at 10% annual return, considering payment for 1st 5 years and then withdrawal of Term premium annually for remaining 15, after 20 years the amount would be 3 Cr.
Practically all mutual funds provide 12 to 14% returns in the long run. Even NPS (with medium risk) has provided average 12 to 16% return in last 10 years. So actual returns can be even higher. And in case of death during these 20 years, your family gets 1 Cr (insurance) PLUS accumulated investment, whereas in case of ULIP, the family gets ONLY the death benefit.
Now you can compare with what the RM has given.
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Pradumya
TF Ace
Just one
The returns you earn with this ULIP (if you survived) will be equivalent to FD returns or even less. Just do that exersise given in the video link provided earlier.
You will get to see the return that your money will earn. I can guarantee that it will not exceed 8%
I also recommend this.
Just to mention, the ULIP has premium component that means it will be mandatory to pay whereas in case of MF it can be paused in case of financial distress. Also the returns will be higher in MF even index funds.
How did you come to that number? I am confused.
The one RM sent me is linked to this - https://www.moneycontrol.com/insura...-capital-builder-high-growth-fund-IMA061.html
The Return rate in past 5yrs (during the covid period) was 31% and before that from 2014 to 2019 it was 9.81% yoy, both over what Nifty provided at the same time frame.
If I factor that in to the calculation then. 10lk I invested every year for 5yrs would become 2.28cr after all the fees and taxes.
Same thing if I invest directly to MF, it becomes 2.32cr without AMC & 2.3cr with AMC.
Not much of a difference, if anything it is cheaper than Regular MF.
I do not want to opt for Term plan directly, because I trust my family to screw it up and not getting the money. I trust my family as much as I trust the term plan providers when it comes to this.
The link you provided is IRR calculator, but that's not something I can factor in right now, because that's for guaranteed return plan, this is purely market linked. The only fees thhhey are charging here is the FMC, nothing else.
As for the premium component is mandatory, I talked to RM they told me that you can stop paying after 1yr if you want, but cannot surrender tiill 5yrs unless medical condition arises. I am yet to read the T&C of the plan.
Plus the surrender value is also > than the amount I am paying (if market performs even 2%).
You need to calculate XIRR to understand annualised returns
How can you XIRR this?
There is no guaranteed return. It's market linked. Am I wrong?
You are correct, it’s market linked and there’s no guaranteed return i have calculated based on values in the spread sheet for 20 yrs
anandtk
TF Neo
ULIP is a good product, particularly with waiver of premium options
1. Please consider long payment terms min 7 to 15. Long policy term 20-30 years
2. Split one savings plan for 5lk and 1 ulip for 2.5 lks to get max tax gain
3. Consider ( tata aia ulip ) only ulip with morning star 5 rated funds which have delivered exceptional return even compared to regular mf .. 4. Contact me if you want to know more
. Happy to help.
5. Last but not least , Tata aia has term plans that may suit you too ..
Thanks
Anand tk
I checked.
If I put 8% projected return i get 7.4% at the end of the 20yrs with all fees and everything deducted.
At 30% Return Rate it becomes 30.47% because of loyalty bonus and all that...
At 15% it's 14.72% post fees.
30% annualised returns over 20 years is impossible to get
That's a separate thing.
It's just for net return estimation.
Even at 12-15% which is realistic for 20yrs there is only 0.3-0.4% fees. Is that bad?
IF the ulip manages to provide that kind of return then it’s fine but generally it doesn’t happen
There is list of MF that they gave me a pdf of, of which I selected the one I linked before at money control, they have generally performed over and above what nifty 50 or bse500 gave back. Plus the death benefit.
In stock market historical returns don’t guarantee future returns
That's true for MF too...but we still invest in it.
If I am getting death benefit of 1cr for atleast 5-10yrs for 0.4% expense cost then I think it's a good deal.
That too in my terms where it is guaranteed and family won't have to juggle thru any hoops.
panchabhut
TF Ace
You have already taken a decision that its a good offer. So no matter what the other person says, it would remain a good offer for you. Its your money anyway.
At least others are being productive by suggesting alternatives, unlike you, claiming I've already decided. No one has shown numbers proving this plan gives bad returns. ULIPs may be bad, but maybe this one isn’t prove it wrong, and I won’t take it. I can’t buy a term plan, so suggest better options. Claiming I’ve decided while I’m here seeking advice is dismissive. I’m looking for constructive insights, not baseless assumptions.
