Onevestor's video: ULIP Plans Its Returns ULIPs Are Useless Unless OneTip EP 211

ULIPs are one of THE most mis-sold products in the insurance industry. It’s treated as a hybrid of mutual funds and term life insurance. When you invest in a ULIP plan, the majority part of your premium is invested in equity and debt instruments. And a small part of your premium goes towards insurance coverage. But this hybrid product is neither a good investment product nor a good insurance product. But still they are widely marketed by the insurance and bank agents as an investment product that offers ALMOST guaranteed returns plus life coverage and tax benefits. Now the problem is, almost ALL the ULIP plans are useless for an average investor. HDFC Life Click2Invest ULIP is one THE most popular ULIP plans out there. The best thing about this ULIP policy is its charges. Because unlike a typical ULIP policy, this policy doesn’t have Premium Allocation Charges and Policy Administration Charges. The only charges applicable are the Fund Management Charge (which comes to around 1.35% p.a.) and the Mortality Charge (for the insurance coverage offered). Now I said this ULIP policy is useless for two reasons. First, the insurance coverage provided won’t be adequate for you because the maximum insurance coverage is just 10 times your annual premium. And that’s not all, the maximum policy term is 20 years. So you have to invest Rs. 5 lacs per year to get a life cover of Rs. 50 lacs. So it’s never a good idea to invest Rs. 5 lacs per year to get a life coverage of just Rs. 50 lacs. Now the second reason is, based on the illustration provided by the company, if you invest Rs. 50,000 per year for 20 years, then you get a life coverage of Rs. 5 lacs. And your investment will be worth Rs. 20 lacs after 20 years assuming a return of 8% p.a.. Optically, it looks huge. But the actual CAGR is just 6.50% after deducting the charges. Because if you invest Rs. 50,000 per year for 20 years, your investment should be worth almost Rs. 25 lacs and not Rs. 20 lacs. Now I mentioned ‘Unless’ in the title. Because despite being a horrible investment and insurance product, I personally bought THIS ULIP TWICE and it actually worked better than a Mutual Fund for me. Because I didn’t buy it for its insurance coverage. Instead, I bought it to speculate the market peaks and bottoms. So the tax benefits were just the icing on the cake. And no, it doesn’t really mean in any way that I am recommending this ULIP Plan, because I guess this ULIP will work only for 1 in 100 or maybe 1000. Are you one of them? Well, that’s another for you. – – – – – – – – – – – – – – – – – RELATED VIDEOS: ULIP Plans In Less Than 60 Seconds : https://www.youtube.com/watch?v=3RgCJC9N1Yc HDFC Life Click 2 Invest ULIP Policy | Unit Linked Insurance Plans : https://www.youtube.com/watch?v=lEVb7fW8GTc Life Insurance Malayalam: അറിയേണ്ടതെല്ലാം... : https://www.youtube.com/watch?v=P1AZTh--3Tw I hope you are learning a thing or two from my videos, screencasts, and podcasts. If so, do share my stuff with your friends and family on your social media channels! Happy Investing/Trading! :) – – – – – – – – – – – – – – – – – Want to get in touch? Email: m@maheshone.com Mobile: +91 98472 61321 Twitter: @maheshone Blog: https://onevestor.com/manifesto/ Facebook: https://fb.com/Onevestor Twitter: https://twitter.com/Onevestor