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Satirical Post by an redditor about ULIP and infinia
- Thread starter MONEY
- Start date
Ye batein aise khule me bataie nahi jaati 🥷
Ab ye bhi batana padega kya ki DM me batao😂
Why should I stop defending them? Why is it ok for you to state your point of view but not for someone else to write something contrary?
Mortality charges are refunded throughout the plan. In any case, after 15 years, your corpus would have grown enough that there would be little to no mortality charge applicable. Please research how mortality charges are calculated before trying to argue this point.
There is NO premium allocation charge after first 4 years. You seem to be unaware of so many points and yet you are presenting what looks like expert opinion.
Yes, you do receive an amount of over 10 lakhs at maturity in Smart Protect (take a look at additions column and year 25). Once again, you have not bothered to read the ENTIRE document and have not looked at all the clauses and tables.
Centurion_wala
TF Premier
Now I'm more than convinced that you haven't researched enough and just blindly believed whatever your ULIP Agent told you. Anyways, it's your own money at the end of the day - do whatever you want - burn it or put it in ULIPs but please don't NEVER SAY Ulips are better than Mutual Funds.
shashankrt
TF Ace
Forget it man.. There are some select ppl in this forum who want to justify their "investments" in ULIP. If any one has to go through a 25 page document to understand all the charges, that itself implies what kind of crappy product is ULIP. Also ppl who are justifying ULIP have perhaps not seen those years when markets are stagnant or on decline. If that happens then its blood bath in ULIP returns.
If I get 2 options - burn my money or put it into ULIP, I would go for the 1st one to get me warm during the winter!!! 😂
Another milestone achieved..
Based on my Imperia / Infinia/ ULIP relationship , got the free locker , a medium sized one , in a branch located in a posh area of Hyderabad..
WIth this , I achived whatever I wnat to achieve with my ULIP ...
1) Infinia Metal LTF
2) 0 MAB imperia
3) Free Locker , medium sized.
done with HDFC..as of now...
I will see what I can do with Infinia Reserve , when it arrives...
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ULIP giving better returns than mutual fund is unheard of and that too 10 lacs more that too in 25 years 🙄 If this was the case , people would have lined up like iPhone for ULIP 😅
Rather longer the period and better returns MF gives than ULIP. MF beats ULIP in real returns. If I take 100 Rs. from you and give it back after 10th year, you lose investment opportunity on that 100 rs. for 10 years and that would be easily more than double.
The issue with ULIP is never rate of return but always losing the opportunity to invest a certain amount due to high initial charges and this results in much lower return than MF.
For eg. If you invest 5000 Rs. and get 8% return for 10 years, you get 10,794 after 10 years. But if you invest Rs. 4000 for same period and get same return, you get only 8635/- after 10 years. That's the difference of almost 20%
This diffence will keep on increasing every year. So, ULIP can never give higher return than MF, until upfront charges for both are same.
I meant. I took card against investment. But they missold me the investment plan.hence I had to cancel the investment.
I am not doing this now because of irrational market conditions. It may simply claimed that because of bullish market conditions the ULIP is doing well
So I decided to postpone it to next year
I will do this once a year starting from next year.
If you want to assume something without any evidence and research then I cannot change your mind. First of all, my ULIP was for the purpose of getting Infinia. So any gain or loss makes no difference to me at all. A couple of lakhs a year is a tiny amount to worry about. Even if I get a 4% return, I am fine.
Coming to your claim, yes, it is correct that there is a small opportunity cost as a portion of the premium is deducted as fees. However, keep in mind that after 10 years, you get back all mortality charges at 2x. Meaning if you paid a total of 3 lakhs as mortality charges till then, you would get an addition of 6 lakhs to the fund (in installments each month just like the charges were deducted). So that makes up for the loss of opportunity cost to some extent. Mortality charges are calculated on the difference between sum insured and corpus. So if your sum insured is 25 lakhs, then no mortality charge will apply once your corpus grows to 25 lakhs. When the corpus is 10 lakhs, you would pay it on the balance 15 lakhs only. Then, if you survive to the end of the tenure, ALL fund maintenance charges as well as allocation charges are refunded. This means an additional bonus of 10 to 15 lakhs depending on the plan as well as fund performance as FMC is a percentage of the corpus. This doesn’t happen in any mutual fund and it gives an advantage to the ULIP. Finally, you save tax as all gains are tax free. Due to these factors, you can actually come out ahead but only if you hold till maturity. You would be way behind if you close it in 5 years. All these are actual facts supported by policy documents as well as the government rules. So please don’t come up with statements like you don’t believe they will pay etc.
Having said this, I wouldn’t invest in a ULIP or recommend it to anyone as there is no reason to tie up your funds for 15 to 25 years. I only did it to get my Infinia.
For those doubting the returns are like mutual funds, take a look the fund performance in the attachment and you might be surprised.
Attachments
hahahaha
You just made a mistake! The NAV is not the actual one you will get.
Again, I would have listened if you would have said this line only:
I wouldn’t invest in a ULIP or recommend it to anyone as there is no reason to tie up your funds for 15 to 25 years. I only did it to get my Infinia.
But no, you just still trying to justify! lol
shashankrt
TF Ace
He will get actual NAV - however the assigned units will be less. Hence if he calculates NAV * assigned units it will be significantly less that his investment (i believe upto 20 percent less) AND this is the point which ppl investing in ULIPs completely fail to understand.
20 percent less investment means even to break even on actual investment, gains have to be more than 20 percent which may not happen in all years and thus causing a net loss. He will be lucky if he even gets 2 percent returns on ULIP if markets remain flat (which is expected due to the recent election results)
Spot on, more or less, yes! Further, GST on premiums and the increasing commissions or rates (I don't remember the keywords related to ULIPs) 😛 unlike the fully transparent MF ecosystem.
Actually I am not assuming at all and have given perfect calculation based on compounding. I agree, if someone desperately wants a credit card, then returns won't matter and if that is the reason that someone has invested in ULIP without caring about returns, then person should not spend time in justifying his action to others. Just be happy with your decision and keep swiping more and more to ensure that you get every buck for your money invested in a dud investment option.
I think you need to read all documents carefully and not fall for sales pitch. If you are in Mumbai, we can meet and have a beer and discuss this in detail. Trust me, It will be a eye opener for you. I am sure you have heard of ELSS, again tax free and no charges like ULIP and best returns.
Exactly my point, returns is based on Units you hold. 100 units x 100 NAV vs 80 units x 100 units, we all know what is better and with compounding, it makes a HUGE difference.
Have never said this? I think you misread something.
And how did the magic number of 20% came? In all the example I see people magically taking away 20-25% and then comparing!! Bro.. don't assume.. Some people are actually smarter than you would assume!! They will get this for lot less.
Rule of ULIP -> It's not a regular type of market investment. Only do it if you are sure of what you are doing. It has multiple disadvantages. But if you use it wisely you can actually save!
Disadvantage-
Mortality Rate -> By far the biggest drawback. If you are in early twenties, depending on policy it can vary between 2% - 6%. This is the only time to buy ULIP unless you have adjusted the tax saving and are sure will recover somehow. If you are in thirties or forties, then it can go from 8-30%. So if you plan it well at early age you won't have much drawback.
Lock-In -> As someone rightfully mentioned, you will miss out investment opportunity. Also if you withdraw or surrender you will be at huge loss.
Advantages -
Tax saving -> Entire return is tax free. (Clause -> a) Recent changes only allows annual premium less than or equal to 4Lakh per annum premium to be tax free!
b) ratio of premium to sum insured should be more than or equal to 1:10. if premium is 1 lakh then sum insured should be at least 10Lakhs. So actually companies only give bare minimum to meet the rule. Notice if you have ULIP insured amount will be exactly 10 times premium)
But now you won't have to pay tax. Even without any 80C benefit, if I invest 1.2L per annum in SIP and ULIP(let's say 5% mortality rate) then after 5 years both will be around 75Lakhs after tax implications (ULIP might be around 74L point something)
But now the biggest differences which majority of folks might not relate to or don't actually need or don't understand -> SURCHARGE
If your salary is high around 50L, 1Cr or so , then capital gain can push you beyond surcharge limit
Example If I earn 55L and after old tax regime deductions I make taxable income as 49L, I won't have to pay surcharge. But if I had capital gain of 6L then after 1L relief for long term also I have ITR of 54L and there will be surcharge on all (capital gain and salary both will have their surcharges), and you will have to pay at least 1.3L extra in taxes just on the salary part.
You might not realise this but if your salary is high and capital gains are high too, then you would realise this. Just imagine why in last year budget them made ULIPs with aggregated annual premiums of more than 4L as taxable?? Because some people were leveraging it smartly and our income tax doesn't want use to be that happy!
I took a ULIP at around 23 or 24 with charges around 4%. My annual returns after deduction (CAGR) is around 20-23%. And guess what? It's tax free. There are drawbacks. But for me it taxes and surcharge is lot bigger concern. Will I take ULIP now ? NO. Time has gone and mortality rate has increased.
So in conclusion I would say take ULIP at early age (not for credit card) that too if you are absolutely sure what you are doing. Do your MATHS.
Other wise avoid ULIPs. In majority cases Mutual Funds beat ULIPs.
Also if ULIP benefits you don't listen to people blindly who don't understand it or don't have high tax slab. They have not done the maths for you (or in fact they blindly believe ULIP is 20% deduction). Be your own judge.
Also every ULIP is different just like every mutual funds are different especially in return.
Finally, I don't feel a credit card is justified ends to take ULIP (unless ULIP is actually beneficial)
Banks earn a lot on ULIP so they would misguide you. Read docs especially mortality rate section.
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