Jagoinvestor
May 28, 2009
Most important questions you should ask a ULIP agent
When an agent approaches you with ULIP product; before filling up forms, he should be explaining you What is a ULIP and how it works! You should ask him the following 6 questions to make sure you know what you are about to buy!
1. What are the returns offered by this ULIP?
As per the rules of IRDA, an agent should explain you the workings of ULIP with an assumptive illustration earning 6-10% returns. However, if he claims that in the long term the policy is expected to give more than 10% then this information is not misleading.
But if he claims that the policy ‘WILL’ earn 18-20% or even Million% returns, you need to stay away from such agents!
2. What are the Charges applicable in this ULIP?
He should give you detailed Information on all the charges that are/will be applicable to ULIP. The important charge you need to know is Premium Allocation Charges.
If he doesn’t disclose any Charge that is applicable then I am sure its not because of his dishonesty and no other reason. Ask him the company brochure mentioning the exact charges where all the charges are listed and explained in detail.
3. How does it suit my Risk Profile and fit in my requirement?
Before suggesting you the ULIP the agent should have asked you all the details about your Cash flow (Salary, Expenses) and your future goals with ULIP investment should be addressed.
He should also try to understand if you can take the risks associated with the ULIP. If he does not ask you these things then you ask him back why he has not asked you these questions. Get the word out of his throat!
4. How is it better than other ULIPS?
Ask him what is unique with the ULIPs he is recommending to you and make sure he does start all non-sense of Sec 80C benefit and high returns and all… Every ULIP has it! Ask him what are the special features with ULIP and how do they address your requirements.
If he claims that his company ULIP is the best and no other ULIP can match it then ask him for references if any states that. Just a plain claim from agents will not do. An agent must have enough knowledge to make you understand how to make best use of your ULIPS.
5. How does it score over Term Insurance + Mutual funds combination?
ULIPS are combination of Insurance and Investment produce, There is no point in taking it, if it cant perform better than Term Insurance + Mutual funds SIP. Switch benefits in ULIPS are the main benefit in ULIPS.
He must put pressure on that point, If not he is him self not aware of it. Refrain from taking the policy if he starts claiming that returns from ULIPS will be much higher than Mutual funds.
6. What was the performance during Market Crash?
Agents generally try to put up rosy picture and hence refrain from disclosing the funds performance in bad markets. If the fund has done bad, that is acceptable. Its investor responsibility to take care of switching and asset allocation.
So there is nothing wrong in performing bad in bad markets. Agents will first try to avoid the confrontation, but finally may tell you that they did bad and returns are very low. Ask him for exact number in return and try to find out how other ULIPS performed.
My personal Experiences
I have never come across any ULIP agent who has tried to sell the product in a professional manner. This has its own reasons like meeting Sales Target pressure or poor training to Agents. Anyways ,its not acceptable and can not be accepted . For so many years, Mis-selling is happening in India.
Conclusion :
Your hard earned money should go in proper investments. There should not be hurry in taking action. So don’t feel shy in asking questions once or twice or thrice, understand the product and its suitability with your requirement.
No product is good or bad, its only bad or good depending on your requirements. So be informed Investor and don’t fall prey to Idiotic agents.
Don’t do mistakes that are already done by tons of investors who took ULIPs for 3 years.
– To save tax
– Make exceptional returns from Stock markets
– Make them self believe its a happening product because it looks so complex
Please share with me if you have taken ULIP for wrong reasons
– Do you think that ULIPS will have any success in future… I feel yes
Hi Manish Ji,
I had taken a ulip ‘New Unit Gain Plus’ from Bajaj Allianze with 15,000/- as annual premium for 10 years and I had deposited 6 times i.e. Rs. 90,000/- against this, then stopped to deposit balance premium as advised by the Agent. Now Policy has been matured in last month (28th Aug’16), but fund value shown is zero, but while I watched one week before from the maturity it shows approx. 1.69 L, why suddenly, it become zero. I couldn’t understand the meaning of ‘Withdrawal charges RP’ , Against this caption – ve value has been shown (-1.69 L). You are requested to kindly suggest me what can I do further to receive money from the company or it may not be possible to get any returns.
Thanks
You might want to check with them only on this.
Hi manish is bajaj future gain plan good
Hi Manish,
I have taken a Bajaj Allianz Future gain ULIP policy for 20 years, currently I am 31 years pld & monthly I will be paying 3500. Policy is having 5 years lock in period & allocation charge 1.5% for 5 years apart from other charges as usual. I have 30 days of time to confirm. But after reading all the reviews & all I am not completely convinced. Below are the fund details. Please suggest.
ACCELERATOR MID CAP FUND – 2
BLUE CHIP EQUITY FUND
BOND FUND
EQUITY GROWTH FUND – 2
LIQUID FUND
PURE STOCK FUND
Thanks
Prasanta
Can anyone please suggest on my above query?
Better not go with this
Is it better than a Fixed deposit? Will it get me more interest than that for 5 years. I do not have an option now. I just read about it after taking it. Thanks for your advice
It might give you if the markets perform well. But you should ask if it will give you more than the best option you could have got ! . If FD is your benchmark, then you might be happy , but thats not the right way !
Hi Manish,
I have opted for HDFC Life ProGrowth Plus plan with annual payment of 60k. Currently my age is 27. I am planning to stay invested for 5years. What is your recommendation on this? Actually I had gone to make a tax saving FD but this was suggested to me. But after reading here now I am worried. Please share your valuable advice.
Thanks
Its not a great option ! … Why have you invested first and then researching now ?
hi Manish,
I am interested in investing in SBI elite Gold single premium Bond Fund insurance with an annual single annual premium of Rs 2,00,000 for 5 years. Is that a good investment and what are the expected returns after 10 years.
I dont think its a good idea. Mutual funds would be a much better choice.
Please fill in your details here if you want support of our team – http://www.jagoinvestor.com/solutions/invest-in-mutual-funds
Manish
Hii,
Manish , I have already taken ELSS plan of 3.5k/month in Axis long term equity and now want to take ULIP plan for more tax saving as well as insurance so please suggest me either should i invest more money in ELSS or ULIP plan for best return??? plz suggest
You should invest in ELSS only, not ULIP
Hi Manish,
Today I have invested 30k in HDFC Life Click2Invest ULIP. I have no idea about investments before. As the agent from policy bazaar suggest this ULIP plan is best compared to MF with 20% returns. But after reading all the articles from internet I’m in confusion now, I have chance to cancel that as it is not completed fully. So please suggest me weather it is best to invest or should I go for other like ELSS. And please suggest me some best investment plans
Better cancel that policy and start your mutual funds investments.
My team can help you full on this, if you can fill up this form http://jagoinvestor.dev.diginnovators.site/solutions/invest-in-mutual-funds
Manish
HI Manish,
I started invested in SBI wealth builder for 1lakh per annum. Policy period is 20 years and premium payment term is 5 years. I want to get good returns. money is invested in 50 % bond fund. and 50% equities. Is this a good idea?
Hi,
KINDLY PROVIDE UR COMMENTS QUICKLY.ITS URGENT.
Dear Manish, j
I have bought Hdfc click2invest plan , almost month ago(single premium of INR 40000). I have paid the premium But IT IS NOT YET ISSUED, due to some pending formalities. After reading all the above review, now I’m confused about my decision. I choose to invest for tax benefit, (as advised by agent). But after research I have realised, tax benefit is extremely low for single premium (jus10% of sum assured). KINDLY suggest, what should I do”? 1) Shall I continue with it? 2) Or may I cancel it? (3) If I cancel, what will be the charges ? as my policy is not yet started and it does not have any fund value. Will they give me my full premium amount.? Or they will apply heavy cancellation charges.? Any idea how much cancellation will cost to me? Thanks in advance. Kindly provide UR reply soon, as Hdfc is chasing me for pending formalities.
HDFC Click2invest is ULIP, but its a good ulip as its a lower cost one. Still if you want to cancel it , you can do so without charges as you have not got it issued till now
Hi Manish,
Is there any portal which gives a ranking of these ULIPs such as HDFC Click2Invest, ICICI Wealth builder, etc
Not known to me atleast !
Hi Manish,
Currently I am planning to buy HDFC Click2Invest ULIP plan for 5 years with INR 3000 monthly investment. I am currently 33 years old. Is ULIP related to age? Shall I go ahead and buy it or go for some other option? Or will go for higher period like 10years or more?
Hi Onkurananda
If you have made up your mind, you can surely go for it. We have a tieup with HDFC for that for our readers. Do you want us to connect you with them?
Manish
Still I haven’t setup my mind. I am still thinking. I have given my contact details to the HDFC team already. Is it a good choice to go with ULIP?
Also can you tell me little bit about Tax saver ELSS fund. Which is the best?
You can go with Axis long term equity funds for ELSS
Thanks Manish. Is it good to invest in the below funds?? atleast minimum 1000 PM
1. BNP Paribas Midcap Fund – Direct Plan
2. Franklin India Prima Fund – Direct Plan
3. Mirae Asset Emerging Bluechip Fund – Direct Plan
4. UTI Mid Cap Fund – Direct Plan
5. Reliance Small Cap Fund
6. Axis LT Equity Fund(G)
7. BNP Paribas LT Equity Fund(G)
Yes these funds are good enough , Go ahead !
In addition to Deepak’s message, I would like to add that I just recently bought ICICI Pru Eite Life II and I feel it is not a better investment than a 5 years FD. Can you tell me if I surrender within 1 month of the purchase of the fund, how much I will lose and will it be a wise decision or not. Thanks so much.
Thanks for your comment Subhasree
People from icici bank are trying hard to sell icici maximizer v product to me. The plan involves paying premium of 2.5 l per year (for 5 years) out of which around 15k would go as fees. So they invest only 2.35 l of our investment. They have loyalty bonus of around 6k per year from 6th year and if we stick to longer period, the fee more or less comes back in this form. In a year, they invest in this fashion.. 90% debt market and 10% equity for first month, 80% in debt 20% in equity on second month and so on. They reach 90% in equity on last month of the year. The agent says since the investment is balanced this way, risk is relatively less at the same time return prospects are good. I really can’t make any decision and I have just kept them on hold. Is it a good plan? My intent is to grow the money at a better rate than FD and l have low risk appetite. The plan has 25lacs life insurance too.
I read this blog and few other blogs that don’t recommend ulip with life insurance. I mentioned that to my agent and asked for some mutual fund products. He said mutual funds carry higher risk and don’t offer this kind of split investment.
I really don’t know how to proceed in this case. Any suggestions? Please do suggest any other good products that you are aware.
You agent is misguiding you . On the name of “risk” they are discouraging you to invest in a wonderful thing called Mutual funds.
LEarn more about it on net and you will figure out . Or you can also talk to my team on this – http://jagoinvestor.dev.diginnovators.site/start-sip
I am investing in Birla sun life vision life secure plan. Is this a good plan to invest or there are better option than this.
Avoid it !
Thank you Manish can u please tell me top 3 SIP plan I should invest in.
We can suggest you that, Are you new to this ? Do you need our assistance in investing also ?
Hi Manish,
I have just now taken SBI Life – eWealth Insurance Plan for 15 years with monthly 6000 contribution in ULIP plan.
Sum Assured Multiplier Factor(SAMF) is 10
Sum Assured (Rs.) 7,20,000
Plan Option Growth
Applicable rate of Tax* – 14.50%
Growth – Equity Fund 70 % allocation
Growth – Bond Fund 30 % allocation
How much return I can expect from this policy after 15 years.
9-10%
HI Manish,
I have surrendered this policy within Free Look Cancellation period.
I have started SIP of 30,000 per month in Axis Long Term Equity Fund – Direct Growth ELSS Plan.
How much return I can expect from this after 15 years?
Around 12% on average per year !
Hi Manish,
I took ICICI Wealth Builder ULIP 2 years back with yearly premium on Rs.50,000. 5 years premium frequency and maturity at 10 years. Paid 3 premiums till now.
I am having a very basic question. Whether the premium paid will get any interest towards my capital invested and gets compounded until my maturity. If the maturity amount depends only on the NAV during the maturity date, what will happen to the capital i have invested & locked for 10 years. Please correct me if my understanding is wrong.
There is no capital protection .. I mean the NAV can rise and fall and your overall wealth can be up and down .
Thanks for the clarification
Hi Manish
Have invested in future Generalli
Dhan vridhi plan
2lac premium for 5yrs & 10yrs policy term
They assured me of min11-14%return after 15 yrs can u plz give ur comment
IS it written in your document ?
Hi Manish,
I am currently 25 and was looking for ULIP plans. I found a ulip plan by max where premium has to be pain for 5 years , 1lakh per year…. It has 50% in debt and 50% is equity.
I do not have financial burden or family burden.
Is this good place to invest? I was comparing how good or bad is this plan when compared to FDs
Thanks
Generally its not suggested, but HDFC has a good ULIP with lowest charges now . You can consider that if you want.
Let us know if you want us to connect to them . We have a special tie up with them for our readers.
Hello Manish,
I am a NRI and looking forward to invest in ULIP,s from Kotak Mahindra group i.e. kotak platinum or kotak invest maxima along with the 10 times cover they offer for insurance.
Can you please suggest if it is worth investing in these plans or do we have any other good plans wherein I can invest ?
Thanks
No , its not suggested. Its better to invest in mutual funds . The only ULIP I can suggest is HDFC click2Invest, which is a low cost one ..
Incaes you want to do that or in mutual funds , my team can help you incase you are ok.
Manish
Hi Manish,
I have the same Dilemma. I am a NRI based in US and as per latest regulations US NRIs cannot invest directly in Mutual Funds. ICICI is trying hard to sell me ICICI Wealth Insignia Product . (It is a combination of ICICI Elite Wealth II and ICIC Pru Ipotect SMART). They claim an avg return of 15 % return which are all tax free for NRI individuals. Charges seem high + the fine print. Please advice if there are other funds for NRIs based on the above background
Thanks,
Sam