ULIP (Unit Linked Insurance Plan) isone of the mostpopular investment tools among Indians. Also, LTCG is not levied on the maturity amount as per the Budget of 2018! This is interesting enough to make an average investor dive in for aULIP policy.
ULIPsare an offering of the insurance industry. They are a mix of insurance and investment. ULIPs are ideally a good investment option for long-term financial goals such as wealth creation, children’s education and retirement planning.
According to industry experts and investment gurus, the Aegon Life Protect Gain Plan offered by Religare Life Insurance is the best ULIP policy for 2018. Even though there are many sub-offerings under this umbrella, the Balanced Fund plan has turned out to be a winner with a net return of 9.39% per annum.
Let us cover the important features of this policy.
Entry Age –
The minimum entry age for this ULIP plan is 7 years while the maximum entry age is 40 years.
Minimum Premium –
The minimum base premium to be paid under this ULIP plan is Rs. 12,000. Depending on the premium other charges are calculated by the company.
The premium could be either annualized premium or half-yearly or quarterly premium depending on the plan chosen by the policyholder.
Maturity Benefits –
The company pays the maturity amount in a single go onthe date of maturity of the policy. But it also allows the policyholder to exercise a settlement option wherein, he/she may receive the maturity benefit in structural payments made at regular intervals. This is a great feature, especially from the perspective of a retirement ULIP plan.
Partial Withdrawal Charges –
The lock-in period for this ULIP policy is three years. In the first 3 years, no withdrawals, whatsoever, can be made by the policyholder, after the partial withdrawal is allowed by the company. Just like the maturity benefits where the company allows recurring settlement, it also allows systematic withdrawal, at periodic intervals. Lump sum withdrawal is also allowed. The maximum amount, which can be withdrawn by the policyholder, is 20% of the NAV at the inception of the policy year.
Investment Funds –
This ULIP plan falls under the Balanced Fund option of the company. Hence, the equity exposure is limited to a maximum of 30%. The Debt-Equity investment ratio is 70:30. This safeguards the investor from sudden fluctuations in the stock market and volatility of the indices.
Charges –
All the standard fees and charges of a ULIP plan are applicable to the Aegon Life Protect Gain Plan. Premium allocation charges, mortality charges, fund management charges and policy administration charges are all a part of the premium paid.
Policy Surrender –
The policyholder can surrender the policy at any time during the tenure of the policy. However, the company charges heavily if the ULIP plan is surrendered in the first three years. There are no surrender charges on the policy from the fifth year onwards.
Invest Protect Option –
The Invest Protect Option is one of the most interesting features of this policy. In the case of investors who are not well versed with the world of finance, share markets and a jargon of financial formulae. If the policyholder chooses this option, then they are not required to make the decision of how to allocate the premium to various investment funds. The company takes it upon themselves to make the best possible investments on behalf of the individual in a very systematic manner. During the first three years of the policy, the money will be invested in enhanced equity funds. On the other hand, during the last three years of the policy, the money will be invested in secured funds only. This protects and insulates the investor. They need not fret at all over the allocation ratios!
Auto Rebalancing Option –
The Auto Rebalancing Option does exactly what its name suggests. On the completion of every year of the policy, it will rebalance the funds in line with the allocation proportion effect. This is an opt-in or opt-out kind of option. In fact, an investor can even decide to opt-in for one year and skip it during the next year. It is completely upto the ULIP policyholder.
Switching –
Like all ULIP plans, Aegon also allows switching of funds on the preferences of the investor. You may change your premium allocation funds from equity to debt or vice versa, or the proportion invested in equity or debt. But the company will charge you with Switching Charges for the changes you make. This is also a very standard fee that is levied by all ULIP providers.
NAV (Net Asset Value) and Returns –
As on 14th August 2018, the NAV of this ULIP policy stood at 23.8370, while the returns as on date stood at 9.3926%
In case you are looking for a good plan to invest your hard earned money with the benefits of both life insurance and investment, ULIPs is the road to take. This ULIP plan, the Aegon Life Protect Gain Plan (Balanced Funds) is a good place to start with!