Satirical Post by an redditor about ULIP and infinia

[MONEY]

Today came across a post on reddit by a user who was fedup by one of the notorious RM on reddit who honey traps innocent people with the greed of getting them infinia if they do investment.

 

[m4b]

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.

I didn’t read, only first few lines. It’s sad to see the LIC era begins in a new way. I just hope GenZs don’t fall into this trap.

PS: I didn’t go by the calculations.

 

[violetevergarden]

I didn’t read, only first few lines. It’s sad to see the LIC era begins in a new way. I just hope GenZs don’t fall into this trap.

PS: I didn’t go by the calculations.

If you have any valid eye opener except mortality rate, then do let us know, I wopuld be more than happy to know and acknowledge and even adjust that in my calculation

 

[m4b]

"I didn't go by calculations"?? They you go by instinct or sixth sense?
I respect if you dont like ULIP and it doesnt suit you.
Anyways, I have seen your previous comments, you dont have valid points or data about terms and conditions.
You simply have made you mind. Maths will be too dificult for you for sure. So ignore my comment. And dont worry about GenZ. Just hope they are better at understanding technicalities than you.
Also if you would have read my post you would have noticed I dont recommend ULIP myself unless some exceptions are there which would only suit very few percentage of folks. For majority ULIP can be unnecessary. But unlike you, I did the maths before declaring that.

Haha you should be good because I haven’t put my brain into the calculations yet because I know many who would do the honour gladly. The day I arrive at the calculations you will be no where to hide. I don’t need your so called suitable valid points to prove.

 

[m4b]

If you have any valid eye opener except mortality rate, then do let us know, I wopuld be more than happy to know and acknowledge and even adjust that in my calculation

I made these points with LICs. Many of my friends were defending till I arrive those magic numbers. Give me time I will come up with numbers.

 

[violetevergarden]

Haha you should be good because I haven’t put my brain into the calculations yet because I know many who would do the honour gladly. The day I arrive at the calculations you will be no where to hide. I don’t need your so called suitable valid points to prove.

Actually I dont want to argue with you. If you have any other demerit in hidden conditions (which I know ULIP has a lot) besides mortality rate let us know. Otherwise no one is interested in hahah comments

 

[violetevergarden]

I made these points with LICs. Many of my friends were defending till I arrive those magic numbers. Give me time I will come up with numbers.

That would actually be very kind. Genuinely speaking. In fact we should make that a thread. Hidden terms and conditions are tough to decipher. But if you do it would help a lot of people. I am not in favor of ULIP

 

[violetevergarden]

I made these points with LICs. Many of my friends were defending till I arrive those magic numbers. Give me time I will come up with numbers.

Also you do realise majority of people including myself are here to learn. "Nowhere to hide"? I dont need anywhere to hide. I would respect and acknowledge my mistake and thank you for making us wiser. No one is perfect. Why are you taking it as war? but the only thing is that if you are making claim, please give numbers and hidden terms so we can also know!! I am sorry if I offended you. But please given points. I will be more than happy to be wrong if I learn something.

 

[m4b]

That would actually be very kind. Genuinely speaking. In fact we should make that a thread. Hidden terms and conditions are tough to decipher. But if you do it would help a lot of people. I am not in favor of ULIP

That's what I said earlier! Don't mix up MFs with ULIP and Insurance. I am not against or favour anyone's style of putting money into anything. I am just against the fact that people market ULIP as another MFs or ELSS. That shouldn't happened.

 

[m4b]

Why are you taking it as war?

I didn't lol! You provoked me. Anyway, ignore

 

[violetevergarden]

I didn't lol! You provoked me. Anyway, ignore

Sorry for that. Still, besides mortality rate, do you see any other big drawback?
Also ULIPs are different for sure. But tax saving from ULIP can come handy especially near surcharge range.

 

[m4b]

Sorry for that. Still, besides mortality rate, do you see any other big drawback?
Also ULIPs are different for sure. But tax saving from ULIP can come handy especially near surcharge range.

Will check, about to get my father’s ULIP policy document ☠️( some guy at local branch sold it to my father behind my back).

 

[Wealth is my birth right!]

Nice debates here
Meantime any one knows @SSV post reg ulip thread which is there in initial posts of this thread by op?
My scenario took 2 ulips in 2011 due to one of my gf sale target one with sbi and other aditya birla both i exited after 3 yrs
She worked for a company Bajaj Capital not sure it exists now
So i don’t have holdings in ulip as of today but infinia is itching lol

 

[violetevergarden]

Will check, about to get my father’s ULIP policy document ☠️( some guy at local branch sold it to my father behind my back).

Father?????!!!!! The mortality return would have killed all the funds! Like 20-35% types

 

[m4b]

Nice debates here
Meantime any one knows @SSV post reg ulip thread which is there in initial posts of this thread by op?
My scenario took 2 ulips in 2011 due to one of my gf sale target one with sbi and other aditya birla both i exited after 3 yrs
She worked for a company Bajaj Capital not sure it exists now
So i don’t have holdings in ulip as of today but infinia is itching lol

Hahah as long as anyone doesn’t mix up with MF, we are good 😛

 

[m4b]

Father?????!!!!! The mortality return would have killed all the funds! Like 20-35% types

Haha cant do anything except cry and laugh. If only my father would listen to my investment advices I would have messaged this while sitting inside McLaren, but no he made sure listen to a guy from local branch.

 

[m4b]

Haha cant do anything except cry and laugh. If only my father would listen to my investment advices I would have messaged this while sitting inside McLaren, but no he made sure listen to a guy from local branch.

10 years back I asked him to invest ~50K in bitcoin. The first investment advice from me lol. Bitcoin was trading around 9-10K rupees that time ☠️

 

[m4b]

10 years back I asked him to invest ~50K in bitcoin. The first investment advice from me lol. Bitcoin was trading around 9-10K rupees that time ☠️

For same reason I have invested 70-80% of my portfolio in pure equities as he doesn’t listen to my advice and has kept all in FDs. For a while he was keeping large part of worth in savings accounts then I had to arrange somehow to open FD 🤣

 

[violetevergarden]

10 years back I asked him to invest ~50K in bitcoin. The first investment advice from me lol. Bitcoin was trading around 9-10K rupees that time ☠️

Lol... I see your pain now.....

 

[Wealth is my birth right!]

10 years back I asked him to invest ~50K in bitcoin. The first investment advice from me lol. Bitcoin was trading around 9-10K rupees that time ☠️

U r the best fund manager 👌

 

[shivamk]

For same reason I have invested 70-80% of my portfolio in pure equities as he doesn’t listen to my advice and has kept all in FDs. For a while he was keeping large part of worth in savings accounts then I had to arrange somehow to open FD 🤣

Ab humko btao kaha paisa daalein