All about Life Insurance!

Tata AIG Life launched new product InvestAssure Superstar a child ULIP plan.

Policy comes with a Waiver of Premium in case of death or Permanent disability of the life assured.

• Family Guard – It will pay 100% of the future premiums into your policy as if the policy is on monthly mode (OR)

• Family Advantage – It will pay 50% of future premiums into your fund as if the policy is on monthly mode and 50% to the policyholder/nominee as if the policy is on monthly mode.

Policy has a flexible policy term between 10 – 25 years and flexible premium paying term of 5,10 -25 years.

Minimum premium is Rs. 20,000 for term between 10 – 25 years and Rs. 48,000 for 5 years term.

There are variety of funds type available to choose . Top 50 Fund, Top 200 Fund, Super Select Equity Fund, Aggressive Flexi Fund, Stable Flexi Fund, Large Cap Equity Fund, Bond Fund & Super 110% Capital Guarantee Fund.

Policy has an option to save under Systematic Money Allocation & Regular Transfer Investment (SMART), here Through SMART, one can initially park their annual allocable premium along-with any existing units in any one fund (chosen out of the funds of Tata AIG Life Invest Assure Superstar). This fund is called the "Accumulation Fund". There after a defined portion out of the Accumulation Fund will get transferred to another fund (chosen out of the funds of Tata AIG Life InvestAssure Superstar other than the Accumulation Fund) on a monthly basis. This fund is called the "Target Fund".

On maturity total fund value + Guaranteed Maturity bonus is paid, guaranteed maturity bonus is between 2% to 4% of regular premium fund value depending on policy term.

Allocation charges are between 8% to 26% in the first 2 years depending on premium amount and premium paying term. It comes to as low as 1% from 6^th year onwards.

Fund management charge is flat 1.20% of fund value per annum.

Policy can be surrendered without any charge after 5^th year.

HDFC Standard life’s Young star super is a ULIP plan with a variety of option to choose in terms of risk cover.

1) Double Benefit.

Sum Assured is paid + all future premiums are paid by Company.

2) Triple Benefit.

Sum Assured is paid + 50% of future premium paid to policy account and rest 50% to nominee.

3) Critical Illness Benefit: One can also add critical illness benefit with the above two option. In case if one is diagnosed with critical illness and he has chosen double benefit then SA is paid + company will pay the future premium.

For each of the benefit you choose appropriate amount will be deducted from your account. Charges depends on your age and option you choose, so nothing is free ;-)

Bumper Addition:

On Maturity along with the Fund value + amount equal to

1) 50 % of annual premium if term is 10 year.

2) 100% of annual premium if term is 10+ year.

The additional amount is paid only if there is no partial withdrawal and all premiums is paid regularly.

So on features side, although there are plenty of things for offer but at the same time you have to pay additional charges for each of the benefit you are choosing.

Charges:

Allocation charges:

With New IRDA rules most of all the insurers are coming with allocation charges which is less then 20%.

However in my views ULIP would be more attractive if allocation charges comes down to as low as 5% to 3%.

Depending on premium amount you pay it ranges between 15% to 8% of annual premium in the first year (However for monthly premium mode it ranges from 22% to 13%).

In second year it is 10% to 6% and in third year it charges 5% to 4%.

From 4^th Year onwards it is flat 3% of premium..

For single premium it ranges from 2.5 to 2% of premium.

Policy Admin. Charge:

Rs. 50 per month with 5% addition each year.

• There are 7 funds available to choose from and 24 switches are free of cost.
• Partial withdrawal is allowed free of cost from 5^th policy year if all premiums is paid.
• Surrender is also allowed without any charges,only of all premiums is paid.

If we compare it with other policies in the market like TATA AIG’s Invest Assure Sampatti and Aegon religare’s Invest Maximiser, Charges are very high. No doubt that it has other features but none of the features are free.