After selecting insurance plan, most of the time people never care about mode of payment.
Many People choose quarterly mode because they find it flexible, while those who believe in one time settlement choose Yearly mode.
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ULIP policies offer many benefits which are not available in traditional insurance products, like partial withdrawal, lock in for only 3 years, high return, flexibility to choose insurance cover, top-up facility, fund options.
Let us take a look on all one by one.
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No Allocation charge means 100% of your premium gets invested, unlike most of the ULIP where 10%-20% of premium amount is deducted which indirectly leads to lower return in the long term.
Please visit the ULIP charges link to understand how allocation charge plays critical role while building the long term corpus.
Although many products are now available with NILL allocation charges (like ICICI PRU ACE), however this product stand out from all of them as if you pay premium in access of Rs. 50,000 then additional amounted will be allocated …
Premium Amount (Rs)
Regular
Premium Plans
Rs 50,000 - Rs 99,999
0.5%
Rs 1,00,000 - Rs 4,99,999
1.5%
Rs 5,00,000 and above
2.5%
For eg if you pay Rs. 50,000 then Rs. 50,250 is allocated to buy units.
Apart from the above feature it has all the regular features that an ULIP plan requires.
1) Single and regular premium option
2) Life cover, Critical illness cover (amount is deducted out of you’re a/c)
3) No surrender charge after 5th year and partial withdrawal from 4th year.
With popularity of Highest NAV ULIP’s finally LIC has launched Wealth plus.
There is nothing new in this product apart from the brand name of LIC and an extended insurance cover for 2 years, so this plan is strictly for those who wants surety of highest NAV and don’t want to take a risk of parking their money with private insurers.
Comparison of features with highest NAV products:
SBI Smart ULIP
ICICI Pinncle
Bajaj Max Gain
LIC’s Wealth Plus
Min/Max Entry
8/60 years
8/65 years.
8/60 years
10/65 years
Max Maturity
70 years.
75 Years.
70 years.
75 years
PPT/Term
3 or 5 year/10 years
3 Years./10 Years
7/10 years
3 or single/8 years
Min/Max Premium
50,000 yearly
50,000 yearly
25,000 PA/No limit
20,000 PA or 40,000 Single premium
Min/Max SA
5 times yearly premium
5 times yearly premium
5 times yearly premium
5 times yearly prem /1.25 times single premium
Entry premium is less compared to other ULIP and in addition to it there is a single premium option. Maturity amount is also paid at the end of the term which is 8 years.
After policy term an extended risk cover is provided for the next 2 years in which on death SA is paid to the nominee.
Charges:
SBI Smart ULIP
ICICI Pinncle
Bajaj Max Gain
LIC Wealth Plus
Allocation charge(% of premium)
15% 1st year, 5% thereafter.
14% first year, 4% 2nd year, 2% 3rd year.
For lower premium band it is 20% in 1st year, 6% in 2nd year, 3% in 3rd year, NIL therafter.
For lower price band 12% in 1st year. 2.5% thereafter.
5% for single premium.
Policy Admin. charge
Rs. 60 pm throughout term + Rs. 5 per year per thousand SA for first 3 years.
Only for 1st 3 years, between 0.40% to 0.60% pm of annual premium.
1.26% of First years SA perm month for entire term.
Rs. 60 pm for 1st year, Rs. 25 pm for 2nd year, 3% pa increase from 3rd year.
Fund. Mgt Charge
Between 0.25 to 1.50% pa
1.35% PA + 0.10% PA (for guarantee of highest NAV)
1.25% PA
1% pa
Surrender Charge
3rd Year: 9% , 4th Year: 2%, 5th Year + NIL
3rd Year: 4% , 4th Year: 2%, 5th Year + NIL
NIL
NIL allowed after completion of 3 year.
Maturity:
SBI Smart ULIP
ICICI Pinncle
Bajaj Max Gain
LIC Wealth Plus
Highest NAV
For first seven years based on two reset dates each months.
First seven years based on daily NAV.
For entire term of 10 years based on daily NAV.
For 7 years based on daily NAV
Other addition
NIL
3% of fund value
% of Total Allocation charge(see below table.)
2 years extended risk cover where SA is paid in case of death.
Not much difference as far as highest NAV calculation is concerned, only notable thing is 2 years extended risk cover.
Here are once again links to highest NAV products.
