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Ulips have become the rage. But few know that its not only the charges, the equity exposure of the fund chosen also matters a lot. Here's a comparison - know which one fares well
If you’re nearing 40 years of age know that its time you gave a thought to retirement planning. While adequate insurance is a must to meet those unforeseen situations life can spring up, you also need to increase your returns to beat the increasing inflation over a period of time. And what better than Unit Linked Insurance Products (ULIPs). These products combine insurance and investment to give you market linked returns.
There are several ULIP pension products available in the market to choose from. While these products are linked to the market know that if you are risk averse you can invest in the most secure bond funds too. And if you are ready to take some risk and are of the opinion that equities outperform all other over a long period you may choose to park your funds in growth funds or equities depending on your risk taking capacity.
One such unit linked pension product is Market Plus from Life Insurance Corporation. Here we take a look its features, the charges associated with it and how it would compare with a few other peer products when we consider a period of 10 years on an investment of Rs 20,000 annually and a yearly growth rate of 10%
Features: Market Plus is a unit linked deferred pension plan from Life Insurance Corporation available with or without risk cover. You can choose from single premium or regular premium. Being a unit linked plan your premium will be applied to purchase units as per the fund type you choose from bond fund, secured fund, balanced fund, and growth fund.
You may choose to invest in any of these funds depending on your risk profile. The bond fund invests 100% in the debt market, while secured fund invests upto 85% in the debt market and a maximum of 35% in equities. The balanced fund invests upto 50% in debt and upto 50% in equities. Similarly the growth fund invests upto 40% in debt and upto 80% in equities.
If you are risk averse you could consider bond fund, but if you can take some amount of risk, balanced fund is the right one for you. On the contrary if you’re young and can afford to take high risks and are also keen about higher returns you could park you money in growth fund.
Eligibility: You can purchase this plan if you’ve attained 18 years. The maximum entry age for this plan is 70. The vesting age under this plan is 40 years which means you can choose to receive pension from the time you’ve attained 40 years and the maximum is 75 years.
Minimum sum assured: Rs. 25,000 for single premium
Premium amount: The minimum annual premium is Rs 5,000 increasing thereafter in multiples of Rs.1,000.Minimum single premium is Rs.10,000 and thereafter in multiples of Rs.1,000.
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