SBI Maha Anand is the ULIP in the simplest form. We already have so many innovative ULIP products in the market hence investing your money in Maha Anand doesn’t makes any sense.
Only thing which might attract the investor is the minimum premium of Rs. 500 pm, however because of high charges I would suggest to create a SIP in Mutual fund.
Terms and Condition:
Min. Premium: Rs. 500 pm; Max Premium: Rs. 2500 pm.
Min. Policy term: 10/15/20 years.
SA: 5 time’s Annual premium.
Death Benefit: Higher of fund value or SA.
Maturity: Fund value.
* Fund value is the number of units x NAV.
* Units are allotted at the time of investment.
Partial Withdrawal: Allowed after 5 years.
Total 3 funds available.
Tax benefit on premium paid and maturity amount.
Charges:
Allocation charge is as high as 30% of premium in first year and later it is 7.5% for 2nd and 3rd year, 5% for 4th and 5th year and for rest 3%.
Top premium is allowed with Allocation charge of 1%.
Surrender charge:
It ranges from 60% of fund value to 1% of fund value between years 2nd and 9th and free surrender is allowed only after 10th year.
So in term of surrender charges also it is a costly bet.
Other charges:
It includes policy admin charge of Rs. 40 pm and it can go upto Rs. 300 pm.
Overall a plain vanilla type policy with only attraction is low entry premium, avoid it in case you are investing it because of low premium and opt for SIP in mutual fund.
ICICI Pru Life Stage Assure pension is a ULIPpension plan which guarantee you theaddition of 120% to 200% of first year’s premium paid depending on the term of the plan you choose(You need to pay at least 5 years premium).
Guaranteed addition:
10-14 years
120%of FY prem.
At 10th year
15-19 years
160% of FY prem.
At 15th Year
>=20 years
200% of FY prem.
At 20th Year
For eg. If your premium is 20,000 pa, and term is 18 years then at the 15th year units with value of Rs, 32, 000 is added to your account.
There is no allocation charge and hence 100% of premium is invested which is the best part of this plan, however investment in the fund start only from 2nd year, first years premium is kept to provide guaranteed addition as described above.
Let us see it with other angle, as first years premium is not getting invested investor loose the interest but 1 second they pay 200% of first years premium at 20th year that means it took 20 years to double your money!, Had it was invested in the equity funds then I believe in 20 years it would have given much more return.
Additional guaranteed addition
So what I mean to say is guaranteed addition come with a cost but then there is also additional guaranteed addition ….
From 6th year onward your account will be credited with an additional unit between 2% to 8% depending on the policy year.
For eg. From 6th year onwards till 10th year out of Rs, 100 you pay units of worth Rs. 102 will be invested.
For a 20 years policy total of (10 + 20 + 40) additional 70% of premium amount is credited.
6 – 10 years
2%
102% of premium
11-15 years
4%
104% of premium
16th +
8%
108% of premium
Overall combination of GA and AA will make this a good pension plan in the long run.
Let us review the other features of this plan.
Fund options:
Like most of the ULIP pension plan it offers automatic switching(Life Cycle based) ofmoney as per age of insured, depending on the age it moves money from high risk to low risk zone at the same time you can also choose (Fixed Portfolio) to invest money as per your preference.
Total of 7 fund available from high risk high return to low risk low return.
Partial Withdrawal:
Allowed after 5 years 1 PW after every 3 year is allowed.
Surrender:
Surrender is allowed after 3 years.
If you surrender before 10th policy year a fund value is paid, and if you surrender after 10th year fund value + Guaranteed surrender addition is paid.
Guaranteed surrender addition is equal to first year’s premium and is paid only if GA is not credited to your account.
This means if you surrender your policy before 10th year you will loose all of your first year’s premium!
Death benefit:
If you have opted for SA then on death SA + fund value is paid to nominee else only fund value is paid, However SA is paid only till life assured is below 75 years age. In case age is > 75 years only fund value is paid.
After completion of premium paying term you will get pension depending on the way you choose pension option and pension amount also depends on fund in your account.
Pension Options:
1)Life annuity.
2)Life Annuity with return of purchase price.
3)Life annuity guaranteed for 5/10/15 years and life thereafter.
4)Joint Life, Last survivor without return of purchase price.
5)Joint Life, Last survivor return of purchase price.
Purchase price is the total amount available in your account on which you will get the pension.
Charges:
No allocation charge as pointed out in the beginning.
There is regular Fund management, Mortality charge, Policy admin. Charge which is within specified IRDA guidelines.
