I have invested 10,000 /- annum(Mar 2007) beside a lock in of 3 yrs.? I want to know,should I stop after 3 yrs. or verbs paying the premium every yr. until the completion of 20yrs?
Wat would be beneficial for me and how?Plz. suggest a web cooperation or any other source to look for? I also have a duration cover.(is it beneficial and how does it affect?)
Answers: ULIP is the highest selling financial product contained by the country. But unfortunately it is also the most mis-sold product. No agent will ever relate you that the upfront costs are as much as 30% in the intial years. So out of your Rs.10,000 Rs.3000 would own gone towards agent comission, fund management charges, admin charges, etc. etc. That imply only Rs. 7000 is getting invested contained by the market! If you get the drift the compounding effect of money (if not read this article Power of Compounding at http://www.valueresearchonline.com/story...
you will realise how big a financial cost is thus hidden from you.
Next anything insurance life cover you are getting can be have at approx. 1/10th the cost thru a separate Term Plan cover. Read why Insurance and Investment should not be mixed here at
Investments? Insurance? Or both?
http://www.personalfn.com/detail.asp?dat...
Insurance vs Mutual Funds
http://www.valueresearchonline.com/story...
Now that you are more educated on how here are far better financial instruments to multiply your money (and separate Term Plan covers to take contemplation of Insurance needs), you know that ULIP is not what you want to continue beside, certainly not for subsequent 15 years. Continuing with big premiums is even more unwise (than losing some money by surrendering) and over the long-term this could hurt your finances plentifully more.
So, Congratulations! You have taken the right but tough but right long-term finding. It is evident that surrendering a ULIP Policy after have paid the premiums for the first 3 years may be considered by masses an unwise leeway, as you stand to lose some money. But then, continuing beside high premiums singular at the behest of your agent is even more unwise and over the long-term this could hurt your finances plentifully more.
There is a surrender value applicable, if you hold paid premiums regularly for atleast 3 years. So you will not lose adjectives your money or premiums paid. There are interesting option offered by LIC too. Read on more...the following excerpt from an article at personalfn.com
The trouble begins when you agree on to discontinue the policy like lots ULIP & Insurance investors have done contained by the recent past, after realising that the policy doesn’t comparatively fit into their scheme of things.
In such a scenario, the policy is considered to own lapsed and all the premiums compensated are forfeited. More importantly, the insurer doesn’t entertain any claims once the policy lapse. However, it should be understood that the policy is not necessarily forfeited i.e. the policy’s pro doesn’t become nil. The Insurance Act does not allow for forfeiture as every policy acquires a reserve base on the premiums already paid.
The Insurance Act provides for a return to the policy holder of an amount i.e. representative of the reserve and this is referred to as the ‘Surrender Value’ or the ‘Cash Value’. The Insurance Act stipulates that every insurance policy shall have a guaranteed Surrender Value, if at lowest possible 3 years’ premiums have be paid. This reserve arises due to the following:
1. Premiums contained by the early years of the policy anyone more than what is justified.
2. Savings component in the premium.
Apart from the resort of surrendering your policy, insurers like LIC also provide other option like making a policy ‘paid-up’, whereby the policy remains surrounded by force with a reduced sum assured, depending upon the number of premiums remunerated. Another option is to save the policy in force by deduct future premiums, from the Surrender Value. A third leeway is to provide term insurance subject to the condition that the Surrender Value is more than the sum assured.
Surrender Value is usually calculated as a percentage of the portfolio returns. Portfolio returns are calculated assuming a nominal something similar to 15% annual growth of the invested amounts (Premiums minus expenses, which as you now know are moderately high surrounded by the initial years)
Read the complete article at
http://www.personalfn.com/detail.asp?dat...
Hope this has ample information for you to take a considered declaration. And if convinced, please spread the knowledge almost ULIP product and how it is mis-sold in this country. Cheers!
I do not proposal anyone to take a ULIP plan becase of the initial charges. These charges are intensely high within initial 3 years. (do not believe me, just check what is your fund importance now). You will not be able to rest your investment in 3 years. )
ULIP are not for short permanent status. These agent mis-sell this product by saying that you can cancel after 3 years. It takes 3 years to of late breakeven the amonunt, forget any return.
As you have already taken a ULIP , I will direction you to invest for long in this. It will average your charges within coming years.
Mutual fund is best for investment & term insurance is the best insurance.
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Wat would be beneficial for me and how?Plz. suggest a web cooperation or any other source to look for? I also have a duration cover.(is it beneficial and how does it affect?)
How can i procure contained by touch near my company's strength benefits populace, so complicated?
Answers: ULIP is the highest selling financial product contained by the country. But unfortunately it is also the most mis-sold product. No agent will ever relate you that the upfront costs are as much as 30% in the intial years. So out of your Rs.10,000 Rs.3000 would own gone towards agent comission, fund management charges, admin charges, etc. etc. That imply only Rs. 7000 is getting invested contained by the market! If you get the drift the compounding effect of money (if not read this article Power of Compounding at http://www.valueresearchonline.com/story...
you will realise how big a financial cost is thus hidden from you.
Next anything insurance life cover you are getting can be have at approx. 1/10th the cost thru a separate Term Plan cover. Read why Insurance and Investment should not be mixed here at
Investments? Insurance? Or both?
http://www.personalfn.com/detail.asp?dat...
Insurance vs Mutual Funds
http://www.valueresearchonline.com/story...
Now that you are more educated on how here are far better financial instruments to multiply your money (and separate Term Plan covers to take contemplation of Insurance needs), you know that ULIP is not what you want to continue beside, certainly not for subsequent 15 years. Continuing with big premiums is even more unwise (than losing some money by surrendering) and over the long-term this could hurt your finances plentifully more.
So, Congratulations! You have taken the right but tough but right long-term finding. It is evident that surrendering a ULIP Policy after have paid the premiums for the first 3 years may be considered by masses an unwise leeway, as you stand to lose some money. But then, continuing beside high premiums singular at the behest of your agent is even more unwise and over the long-term this could hurt your finances plentifully more.
There is a surrender value applicable, if you hold paid premiums regularly for atleast 3 years. So you will not lose adjectives your money or premiums paid. There are interesting option offered by LIC too. Read on more...the following excerpt from an article at personalfn.com
The trouble begins when you agree on to discontinue the policy like lots ULIP & Insurance investors have done contained by the recent past, after realising that the policy doesn’t comparatively fit into their scheme of things.
In such a scenario, the policy is considered to own lapsed and all the premiums compensated are forfeited. More importantly, the insurer doesn’t entertain any claims once the policy lapse. However, it should be understood that the policy is not necessarily forfeited i.e. the policy’s pro doesn’t become nil. The Insurance Act does not allow for forfeiture as every policy acquires a reserve base on the premiums already paid.
The Insurance Act provides for a return to the policy holder of an amount i.e. representative of the reserve and this is referred to as the ‘Surrender Value’ or the ‘Cash Value’. The Insurance Act stipulates that every insurance policy shall have a guaranteed Surrender Value, if at lowest possible 3 years’ premiums have be paid. This reserve arises due to the following:
1. Premiums contained by the early years of the policy anyone more than what is justified.
2. Savings component in the premium.
Apart from the resort of surrendering your policy, insurers like LIC also provide other option like making a policy ‘paid-up’, whereby the policy remains surrounded by force with a reduced sum assured, depending upon the number of premiums remunerated. Another option is to save the policy in force by deduct future premiums, from the Surrender Value. A third leeway is to provide term insurance subject to the condition that the Surrender Value is more than the sum assured.
Surrender Value is usually calculated as a percentage of the portfolio returns. Portfolio returns are calculated assuming a nominal something similar to 15% annual growth of the invested amounts (Premiums minus expenses, which as you now know are moderately high surrounded by the initial years)
Read the complete article at
http://www.personalfn.com/detail.asp?dat...
Hope this has ample information for you to take a considered declaration. And if convinced, please spread the knowledge almost ULIP product and how it is mis-sold in this country. Cheers!
I do not proposal anyone to take a ULIP plan becase of the initial charges. These charges are intensely high within initial 3 years. (do not believe me, just check what is your fund importance now). You will not be able to rest your investment in 3 years. )
ULIP are not for short permanent status. These agent mis-sell this product by saying that you can cancel after 3 years. It takes 3 years to of late breakeven the amonunt, forget any return.
As you have already taken a ULIP , I will direction you to invest for long in this. It will average your charges within coming years.
Mutual fund is best for investment & term insurance is the best insurance.
Resolved Questions: