Insurers want to tap RGESS via Ulips

Invest In Tax Saving Mutual Funds Online

Download Tax Saving Mutual Fund Application Forms

Buy Gold Mutual Funds

Call 0 94 8300 8300 (India)

Insurance companies are keen to offer fund( s) approved under the Rajiv Gandhi Equity Saving Scheme ( RGESS) to potential policyholders for unitlinked insurance plan (Ulip). Even the insurance regulator is with the sector on this.   "We have recommended to the government to also consider the insurance sector for RGESS. Tax breaks should be available for all equity investors across instruments. It would be inefficient to discriminate between investors based on the instrument they invest in," says Hari Narayan, chairman of Insurance Regulatory and Development Authority of India ( Irda).   Insurance sector experts say when the idea is to get more tier- II/ III capital into equities, it would be beneficial for the RGESS to include Ulips, as many small investors put money in insurance products.   Although there is not much clarity on how RGESS can be offered by insurance firms, insurers are pressing for it. After the Ulip guidelines came out in 2010, their sales, which contributed to nearly 90 per cent of insurance companies revenue, slumped and have not recovered. And most insurers feel RGESS in Ulips will be a door opener for the product, which has seen very few takers in two years. Instead, insurers have seen higher sales of traditional insurance products such as endowment and moneyback plans.   According to a senior insurance executive, new products — especially the ones that offer tax benefits —always click with small investors. So, being able to offer RGESS will help insurance companies and Ulips, he says. The sector is very much interested in participating in RGESS but it will need to be modified a bit to suit the sectors needs.   For if RGESS is offered in the present form of Ulips, there will be contradictions.   For instance, RGESS has a lock- in period of three years, while a Ulip has five years. Which one will investors adhere to? Second, RGESS qualifies for tax benefit of ₹ 50,000 under Section 80CCG and Ulips get a benefit of up to ₹ 1 lakh under Section 80C. Which section will investors claim? According to G N Agarwal, CEO and chief actuary of Future Generali India Life Insurance, a fund qualifying under RGESS cannot be added to the existing basket of Ulips.   Insurers might have to launch a new Ulip, offering only RGESS for investment, for which the insurance regulator might relax the lock- in to at par with RGESS.   While Agarwal says the commission structure for the new Ulip might be similar to the one offered by all Ulips, a section feels the commission will need to be increased to be able to attract more policyholders.   Industry players also say the government should club the tax benefits and the section under which both RGESS and Ulips can get similar tax breaks.   NEW ROLE IN OFFING?   |After the Ulip guidelines came out in 2010, Ulip sales, which contributed to nearly 90 per cent of insurance companies revenue, have slumped and not recovered till now |Insurers have seen higher sales of traditional insurance products such as endowment and moneyback plans |Most insurers feel RGESS in Ulips will be a door opener for the product

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

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 in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax PlanInvest Online
2. HDFC TaxSaverInvest Online
3. DSP BlackRock Tax Saver FundInvest Online
4. Reliance Tax Saver (ELSS) FundInvest Online
5. Birla Sun Life Tax Relief '96 Invest Online
6. IDFC Tax Advantage (ELSS) FundInvest Online
7. SBI Magnum Tax Gain Scheme 1993Invest Online
8. Sundaram Tax SaverInvest Online
9. Edelweiss ELSS Invest Online

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

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. 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
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFundsInvest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund