Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

Thursday, January 23, 2014

LIC Money Back Plans - New Version Review

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

 

 

LIC has announced 3 new LIC money back plans under the new guidelines of IRDA.

  • LIC New money back plan – 20 years (15 years Premium paying term)
  • LIC new money back plan – 25 years (20 years premium paying term)
  • LIC's new BIMA Bachat – Single Premium Plan

The names may sound familiar, but the products have been revamped. I will be doing review of LIC money back plans regular premium (20/25 years).

 

Money back plans as the name suggest are the plans which pay back some fixed amount after every specified intervals out of the basic sum assured. Being an endowment and participating plans, it will also announce regular bonuses depending on the profitability of corporation. Also being an insurance plan, it offers a risk coverage / death benefit.

 

As LIC website says – "Money back plans offer an attractive combination of protection, against death throughout the term of the plan, along with periodic payment on survival at specified durations during the term. Thus LIC Money back plans offers 3 benefits:

 

Death benefit, Survival benefit and Maturity benefit.

Death benefit in these policies are as per the new IRDA guidelins. As per LIC money back plans death benefit is the sum total of "Sum assured on death" along with all kind of bonuses declared. "Sum assured on Death" is defined as higher of 125% of basic sum assured or 10 times of annualized premium. This amount should not be less than 105% of total premiums paid.

Survival benefit: in case of 20 years policy – 20% of basic sum assured will be paid at the regular intervals at the end of each 5th, 10th and 15th Policy year. And in the case of 25 years policy – 15% of basic sum assured will be paid at the regular intervals of end of each 5th, 10th, 15th and 20th policy years.

Maturity benefit: This benefit will be comprised of the balance amount of basic sum assured not paid in previous years ( 40% ) along with the bonus amounts if any.

Bonus amounts will be as per the LIC's profitability and experience.

 

Insured may also opt for Accidental death and disability benefit rider by paying extra rider premium.

 

LIC money back plans – Other features

There are some eligibility BASIC conditions in these LIC money back plans

LIC Money back Plans – Should you invest??

 

The good part in these new plans is that the surrender value factor has been clearly mentioned in the product features. Now one would not have to run pillar to post to get to know his policy surrender/paid up value, and with these transparent features one can easily estimate what one would get on surrender or continuation.

 

The returns will surely vary after consideration of services tax, age and different rebates (on Mode of premium and sum assured)which LIC is offering along with. The illustrations generated at the time of product pitching or buying will give tentative idea as to what should one expect in particular case. Do ask for illustration from agent and check what IRR will be generated in your case. Tell your agent to calculate IRR for you or mail your illustration to us, we'll do it for you. You may be told by the agent that corporation is making profits and the bonus amounts will improve going forward but looking at the distribution expenses and other costs associated with endowment plans I believe that you will get tentatively the same or less amount as would be mentioned in the illustration.

 

My view still remains the same. I don't advise to mix investment with insurance. I am sure you don't invest to get the surrender or paid up values and neither you want your investments to generate 3-5% of return in this high inflationary economy. If you have investment horizon of 20-25 years with you there are many different good options available in front of you. For Insurance covers go with pure term cover which is cheapest form of insurance. Keep your investments simple and flexible.

 

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

 

 

Leave a missed Call on 94 8300 8300

 

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

 

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

 

Best Performing Mutual Funds

    1. Largecap Funds             Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds         Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds          Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds   Invest Online

      1. DSP BlackRock MicroCap Fund

2.       Franklin India Smaller Companies

E. Sector Funds          Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds      Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds        Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds         Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

No comments:

Post a Comment

Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

Popular Posts