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Why Ulips ?

Why Ulips ?. Formula 72 If you divide 72 by rate of Interest, you will get the period in years during which the invested amount becomes double Example :– 72/12% = 6 Yrs 72 / 8 %= 9 Yrs 72/16 % = 4.5 Yrs 72/18 % = 4 Yrs.

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Why Ulips ?

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  1. Why Ulips ?

  2. Formula 72If you divide 72 by rate of Interest, you will get the period in years during which the invested amount becomes doubleExample :–72/12% = 6Yrs72/ 8 %= 9Yrs72/16 % = 4.5Yrs72/18 % = 4Yrs

  3. Example – 1If you invest Rs.1,00,000 at 8% Rate of Interest compounding yearly then it becomes :-After 9 YrsAfter 18 YrsAfter 27 Yrs---------- ---------- ----------2 Lac4 Lac8 LacThus in 27 Yrs your 1Lac becomes 8 Lac @ 8% Interest

  4. Example – 2If you invest Rs.1,00,000/- at interest rate of 16% P.A. for 27 yrs then maturity amount will be :-4.5Yrs9Yrs13.5Yrs18Yrs22.5Yrs27Yrs2Lac4Lac 8Lac 16Lac 32Lac 64LacIn other words at 16% rate of Interest, 1 Lac becomes 64 Lac after 27 Yrs.

  5. Question – What do you want, 8 Lac or 64 Lac?Answer will be – If possible I would prefer 64 Lac but 8 Lac is guaranteed, where as what is the guarantee of 64 Lac?

  6. Let us first discuss so called guarantee of 8 LacA look at Interest rate movementYears PPF Rate Year Bank FD1986-87 12%1991 12%2000-01 11 % 1997 11%2001-02 9.5%1998 9%2002-03 9.0%1999 8%2003-04 8.0% 2000 7%2005-06 8.0% 2001 6.5%2007-08 8.0% 2002 6.25%2008-09 8.0% 2003 5.5%2009-10 8.0% 2010 6.5%(Source - PPF Intt. Rate History)(Source – RBI Site)Is Rate of Interest stable? No.This is the era of globalization. Things which are happening in developed countries today will happen tomorrow in our country.In developed countries rate of Interest are ranging from 2 to 3%.

  7. You will say in Fixed Deposit(FD) you get what is told at the time of issue of FD. Yes………but for how many years?(5to10Years maximum)Noneof the financial instrument givesguarantee of rate of Interest for long terms.But there is a sector where possibility of higher returns for longer terms is available. Where ........ (ULIP)

  8. History of BSE Sensex for last 30 YrsYears BSE SensexYrsBSE Sensex YrsBSE Sensex1979 1001989 7291999 5005 1980 138 1990 1049 2000 3972 1981 207 1991 1906 2001 32621982 221 1992 2615 2002 3377 1983 238 1993 3346 2003 58381984 2661994 39262004 66021985 492 1995 3110 2005 93971986 567 1996 3085 2006 137861987 454 1997 3658 2007 20286 1988 613 1998 3055 2008 9647 2009 17464(Source – BSE Sensex Archives)Generally sensex has doubled or more than doubled after every 5 Yrs.

  9. You choose any two yrs where time gap is minimum 7 Yrs.

  10. Conclusion – If you remain invested in ULIPs for atleast 7 Yrs, you may get return ranging from 10 to 28%.

  11. Let us have a look at our one of the ULIP policy which is more than 7 yr old & observe the progress–Bima Plus (Date of Start01.02.2001) NAV on 02.02.2001 - Rs 10.0000 NAV on 16.01.2010 - Rs 52.3267In almost 9 Yrs period NAV has increased from10to52.3267At 16% Rate of Interest – After 4.5 Yrs NAV should be – 20.000 - After 9 yrs NAV should be -- 40.000(But in Bima Plus after 9 Yrs NAV is five times instead of 4 times.)

  12. You will say – This is all data jugllaryBut Sir – Data based decision proves right most of the timeExample1. Weighing machine gives your approximate weight. Your weight may be + or – 2Kg.2. Mile stone tell you distance. Actual distance may be + or – 2 km.3. Similarly difference between expected return & actual returs in ULIPs may not be wider.

  13. ULIP/ULPP : THE CURRENT SCENARIO IRDA HAS CAPPED THE DIFFERENCE BETWEEN GROSS AND NET YIELD AT 2.25% FOR TERM > 10 YRS AND AT 3% FOR TERM 10 YRS OR LESS. THIS EXCLUDES MORTALITY CHARGES. LET US COMPARE GROSS AND NET YIELD UNDER VARIOUS ULPPs (POST RESTUCTURING) WITH THE FOLLWING ASSUMPTION : AGE : 35 YEARS, ANNUAL PREMIUM : 50000/-, TERM : 15 YEARS. SUM ASSURED : 500000/-. (ALL CHARGES INCLUDING MORT. TAKEN INTO ACCOUNT)

  14. JUST COMPARE

  15. JUST COMPARE

  16. CONCLUSION THE COMPARISION PROVES BEYOND DOUBT THAT POST RESTRUCTURING OF CHARGES W.E.F 01/01/2010, MARKET PLUS-I CONTINUES TO BE CHEAPER THAN ANY OTHER EXISTING ULPP AVAILABLE IN THE MARKET. THE RETURNS ARE THEREFORE EXPECTED TO BE FAR BETTER IN THE LONG RUN, WHEN COMPARED TO OTHER ULPPs.

  17. MARKET PLUS –I : SOME USPs • THE PREDECESSOR OF THIS PLAN , ie “MARKET PLUS” GARNERED APPROX. 40000 CRORES IN LESS THAN TWO YEARS PERIOD. • IT’S CURRENT FUND SIZE IS 49000 CRORES. • THE CURRENT FUND SIZE OF MARKET PLUS-I IS APPROX. 32000 CRORES. • INITIAL AND OTHER CHARGES ARE AMONG THE LOWEST. POST RESTRUCTURING IT CONTINUES TO BE ONE OF THE CHEAPEST ULIPS. • ONE OF THE LOWEST FMC CHARGES IN THE MARKET, ie 0.8% P.A., IT LEAVES MORE INVESTIBLE FUND WITH THE FUND MANAGER.DUE TO LOW FMC DISTINCT ADVANTAGE OVER OTHER ULIPS/MFs

  18. MARKET PLUS –I : SOME USPs • UNLIMITED TOP UP FACILITY • AVAILABLE UPTO 75 YEARS (WITHOUT RISK) • ON DEATH, BOTH SUM ASSURED AND FUND VALUE (IN CASE OF WITH RISK PLANS) • LOWEST VESTING AGE IN THE INDUSTRY,ie 40 YR. • EXCELLENT EQUITY PORTFOLIO, ie INVESTMENT IN SCRIPS LIKE RIL,L&T,ONGC, BHARTI AIRTEL, MARUTI & INFOSYS • DUE TO BETTER FUND MANAGEMENT HAS OUTPERFORMED THE SENSEX SEVERAL TIMES. • IN 2009-10 CORPORATION COLLECTED 18154 CR UNDER MKT.PLUS-I WHICH IS 42% OF TOTAL FP COLLECTION

  19. PERFORMANCE SHOWS EXCELLENCE

  20. LIC’S FUND MANAGEMENT:AN EXAMPLE

  21. LIC’S FUND MANAGEMENT:AN EXAMPLE

  22. LIC’S FUND MANAGEMENT:AN EXAMPLE

  23. HOW MARKET PLUS-I OUTPERFORMED SENSEX

  24. HOW MARKET PLUS-I OUTPERFORMED SENSEX

  25. But Sir,If you still want a plan with guaranteed return along with Tax benefit, we have such plan – Jeevan Akshaya-VI.

  26. Why Jeevan Akshay-VI It is the only immediate Annuity plan available with a variety of features. No other Insurer offers immediate Annuity Plan with such attractive features. Pension starts immediately on the purchase of the Policy. No Medical Examination required . GUARANTEED PENSION AS PER OPTION EXERCISED EVEN IN FALLING INTEREST RATE REGIME.

  27. Pension Options Available • Annuity for life • Annuity certain for 5, 10, 15 and 20 years • and for life thereafter • Annuity with return of purchase price • Annuity for life increasing at a simple • rate of 3% p.a. • Annuity for life with a provision for 50% • of the annuity to the spouse of the • annuitant for life on death of the annuitant • Annuity for life with a provision for 100% • of the annuity to the spouse of the • annuitant for life on death of the annuitant.

  28. How is Annuity Payable Annuity is payable in Yearly, Half-yearly, Quarterly or Monthly installments subject to a minimum annuity of Rs.3000/- per annum. The minimum amount of annuity for monthly, quarterly, half-yearly and yearly mode will be Rs.250/-, Rs.750/-, Rs.1500/- and Rs.3000/- respectively.

  29. Who can Buy Jeevan Akshay VI Minimum Age at entry : 40 Last Birthday Maximum Age at entry : 79 Last Birthday Minimum Purchase Price : Rs.50,000/- or such amount which may secure a minimum annuity of Rs.3,000/- per annum

  30. Incentives for Higher Purchase Price Under the policies where purchase price is high, incentive by way of increase in the tabular annuity rate will be given to the annuitant.

  31. JEEVAN AKSHAYA VI (A LOOK ON GUARANTEED RETURNS) & GUARANTEED 95% OF YOUR PRINCIPAL ANY TIME IN YOUR LIFETIME

  32. Surrender SURRENDER of the policy can be allowed on merits even after date of vesting! Surrender value will be as per rules of the Corporation.

  33. ATTRACTIVE GUARANTEED RETURN FOR LIFE TIME AGE 60 YRS OPTION PENSION FOR LIFE WITH RETURN OF CAPITAL RETURN 7.11% LIFE TIME & ON DEATH, RETURN OF CAPITAL TO THE HEIR (9.35% WITHOUT RETURN OF CAPITAL)

  34. If you want higher returns on your investment – Invest in our Market Plus-I Plan which is a ULIP Plan.If you want guaranteed return then invest in our Jeevan Akshaya Plan.Choice is your – Decision is yours.

  35. THANKSfor hearing me attentively.Now, Tell me sir, in which plan you would like to invest ?

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