Insurer: Life Insurance Corporation of India

Category: Unit Linked Insurance Plan
Objective: Provides regular income post retirement

Major USP of Pension Plus:

• Guaranteed return on maturity 
• Low charges 
• All payment options available- monthly, quarterly, semi-annual, yearly

Minimum Entry Age – 18 Years
Maximum Entry Age - 75 Years
Minimum Age at Vesting- 40 Years
Maximum Age at Vesting-   85 Years

Premium Options in Pension Plus

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Minimum Regular Premium: Rs 15,000 per annum
Minimum Single Premium: Rs 30,000 per annum

Death benefit: In case the Life Assured passes away during the policy term, the beneficiary will receive Fund Value as lump sum or annuity as per his preference.

Maturity Benefit: One third of the maturity amount can be received as lump sum and the rest of amount through annuity.

Flexibility in Premium Payment: Both single and regular premium options are available. The payment mode available is yearly, semi-annual, quarterly and monthly.

Guaranteed Maturity Benefit: Pension Plus provides minimum guaranteed interest on gross premium paid. The guarantee interest should be 0.50% above the average reverse repo rate. For the current financial year, the minimum guaranteed return is 4.5% for all premiums received till March 31, 2011.

How is my money invested in LIC Pension Plus? What’s the risk?

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LIC Pension Plus is low risk product as it invests the money in debt oriented fund. LIC Pension Plus has two funds available:

Debt Fund: its low risk fund where the amount is invested in debt market and no amount is allocated in equity market.

Mixed Fund: Its low- medium risk with 15% to 35 % allocation of amount invested in equity market and the rest in debt market.

What will be my returns from LIC Pension Plus?

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The important question that customer wants answered is “What will be my returns in Pension Plus?” Let us take an example: Bhupinder aged 30 invests Rs 25,000 for policy term of 20 years and chooses debt fund.
Assume fund value after four years is Rs 2 lacs,

Death Benefit: If Bhupinder passes away after four years, his wife will get fund value. In this case, Rs 200,000 will be given to his wife.

Maturity Benefit: The returns that Bhupinder will make by investing Rs 25,000 in Pension Plus can be seen graphically:

He gives in total amount of Rs 500,000 to LIC. At maturity, assuming growth of 10% the amount he will receive is approximately Rs 1,333,836. The maturity amount could be more depending on the money market scenario. Longer terms typically provide good returns.

Under Section 80C you can avail tax benefit, yearly premium (not more than 1lac) will be deducted from taxable income.
Under Section 10(10D) death claim is completely tax free.

What charges does LIC Pension Plus deduct and how much?

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Premium Allocation Charges: These charges are deducted as percentage of premium. Insurer deducts these charges on account of expenses incurred by the company – medical examination, policy issuance, underwriting bills. Premium allocation charge in Pension Plus is 6.75% for first year, 4.50% till fifth year and 2.50% thereafter.

Fund Management Charge: The annual charges for debt fund is 0.70%, mixed fund is 0.80% in Pension Plus.

Policy Administration Charge: These are monthly deductions which start from first month and are for maintaining the policy- paperwork, work force etc.  The charge is Rs 30 per month during first year with escalation of 3% per annum till end of policy term.

What else should I know about?

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Top-Up premium: This is the additional premium which can be added above the usual premium to get more units if you think the particular fund is providing good returns. Top-Up cannot be made in last 5 policy years. The minimum Top-Up in Pension Plus is Rs 1,000.

Switch: Switch is made to transfer the fund value from one fund to another. You can make two free switches per year and additional switches can be made by paying Rs 100.

Partial Withdrawal: It is not permitted in Pension Plus.

Grace period: Pension Plus can be renewed within 30 days from the premium due date. Additional 30 days are given after notice has been sent to revive or discontinue the policy.

Free Look Period: Pension Plus plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.

How can I buy LIC Pension Plus?

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Policybazaar representatives will assist you in buying Pension Plus.

What’s Policybazaar opinion on LIC Pension Plus?

Pension Plus is an economic pension plan which is best suited for conservative people. Pension Plus provides guaranteed returns. Pension Plan is not for a person looking to allocate major portion of amount in equity market. Also no insurance cover is attached with Pension Plus.

Personal Loan Overview

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One thing that is common to fulfilling your needs is “Money”. Be it a small thing like consumer durable or your dream of business venture, you need money. There are times when you can take advantage of certain opportunity but are out of required money. Personal loan is the solution to your need of urgent cash.

What is Personal Loan?

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Personal loan is ready money provided to the borrower so that the latter can fulfill his needs. Personal loan is unsecured i.e. no collateral is asked while providing the loan. However a person’s credibility to pay back the amount is established before providing personal loan.

Eligibility:

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The eligibility requirements vary across lenders. The borrowers are segmented into two broad divisions:

Salaried Individual: These include people like teachers, government company employee’s, private company employee’s who receive salary from respective organization.

Self Employed: These include self employed professionals like doctors, chartered accountants and also include individuals like landlords who earn their income individually.

After the borrower has been categorized, further things like age, previous loan histories etc are considered.

Documents required for Personal Loan:

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There are some documents which are to be provided to the lender to make sure that borrower is legitimate. Usually, the documents required are proof of identity, address proof, latest bank statements, salary slip, ITR etc.

What type of interest rate is available?

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Personal loans have options of both flat rate and reducing rate. Flat rate is applicable on entire principal and reducing rate acts on outstanding balance.

Fees and Charges:

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Personal loan have higher interest rates since they are unsecured loans. The interest rate varies from 14% to 25% depending upon loan amount and duration of loan among other things.
The other charges are processing fees and prepayment charges in case you want to return loan amount earlier than chosen time period.

Personal Loan Amount and Tenure Options:

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Personal loan is issued within few days of applying. The minimum personal amount is usually Rs 10,000 and the maximum amount is Rs 1,500,000. The loan period ranges from 1 year to 5 years.

How is Personal Loan repaid?

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After you have chosen the amount and tenure, you have to pay EMI for the policy period. The loan can be prepaid though some additional amount has to be paid.

Click here to get personal loans.

ICICI Pru LifeTime Premier Review

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Plan Name: LifeTime Premier
Insurer: ICICI Pru Life Insurance Company Limited
Category: Unit Linked Insurance Plan
Objective: Financial protection of family and good return on investment

Major USP of LifeTime Premier:

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• Trigger Portfolio Strategy to balance risk and returns 
• Flexible premium payment term. 
• Loyalty Additions

Eligibility of LifeTime Premier

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Minimum Entry Age – 7 Years
Maximum Entry Age - 65 Years
Minimum Age at Maturity-18 Years
Maximum Age at Maturity  75 Years
Policy Term – 10, 15,20,25,30 Years

Premium Options in LifeTime Premier

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Minimum Regular Premium: For regular pay Rs 18,000 per annum
For premium paying term 5 Years: Rs 50,000 per annum
Minimum Premium Paying Term- 5 Years
Maximum Premium Paying Term- Policy Term

Life Cover in LifeTime Premier

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Minimum Sum Assured for age at entry below 45 years – Higher of 10 times of Annual Premium and (0.5xpolicy term x annual premium).
Minimum Sum Assured for age at entry 45 and above – Higher of 7 times Annual Premium and (0.25 x policy term x annual premium).

What benefits does LifeTime Premier offer?

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Death benefit: In case the Life Assured passes away during the policy term, the beneficiary will receive Sum Assured and Fund Value.

Maturity Benefit: The fund value as a lump sum is paid to the policyholder.

Flexibility in Premium Payment Term: Either you can opt for regular premium payment or limited pay of five years.

Loyalty Additions: A bonus of 2% of average fund value is added to your fund every five years from the end of tenth year.

Settlement Option: Instead of taking maturity amount, you can opt for partial payments which will be paid over period of one to five years. The fund will be invested in the same method and can be withdrawn any time.

Flexible Sum Assured: If you feel that Sum Assured is too high or too low, it can be changed at policy anniversary.

How is my money invested in LifeTime Premier? What’s the risk?

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ICICI Pru LifeTime Premier gives you couple of options to manage your investment:

Fixed Portfolio Strategy: You can choose any of the following eight funds where you want your investment to be allocated and you can anytime switch between funds. The funds available are:

1. Opportunities Fund

2. Multi Cap Growth Fund

3. Bluechip Fund

4. Multi Cap Balanced Fund

5. Income Fund

6. Money Market Fund

7. Return Guarantee Fund

8. Dynamic P/E Fun

Fixed Portfolio Strategy has integrated feature- Automatic Transfer Strategy (ATS) when you can direct chosen monthly amount in one of the funds.

Trigger Portfolio Strategy: The investment is managed as per fixed mechanism. The funds are divided in 75:25 proportion in equity oriented and debt oriented fund respectively. Any gain received is automatically moved in safe fund.
The investment risk is borne by the policyholder.

What will be my returns from LifeTime Premier?

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The important question that customer wants answered is “What will be my gain in LifeTime Premier?” Let us take an example:
Ranvijay aged 30 invests Rs 18,000 for policy term of 20 years. He gets insurance cover of 180,000.
Assume fund value after four years is Rs 1 lacs

Death Benefit: If Ajay passes away after four years, his wife will get both Sum Assured and fund value.
In this case, Rs 280,000 will be given to his wife.

Maturity Benefit: The returns that Ajay will make by investing Rs 18,000 in LifeTime Premier can be seen graphically:

He gives in total amount of Rs 360,000 to ICICI Pru. At maturity, assuming growth of 10% the amount he will receive is approximately Rs 905,841. The maturity amount could be more depending on the money market scenario. Longer terms typically provide good returns.

Are there any tax benefits?

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Under Section 80C you can avail tax benefit, yearly premium (not more than 1lac) will be deducted from taxable income.
Under Section 10(10D) death claim is completely tax free.

What charges does ICICI Pru LifeTime Premier deduct and how much?

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Premium Allocation Charges: These charges are deducted as percentage of premium. Insurer deducts these charges on account of expenses incurred by the company – medical examination, policy issuance, underwriting bills. Premium allocation charges are:

Year	% of Annual Premium
1	9%
2-3	7%
4-5	6%
6th and onwards	3%

 

Fund Management Charge: The annual charges for money market fund is 0.75%, return guarantee fund is 1.25% while the rest of fund have charges of 1.35%.

Mortality Charge: These are charges deducted as a part of life cover provided and are recovered through cancellation of units.

What else should I know about?

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Top-Up premium: This is the additional premium which can be added above the usual premium to get more units if you think the particular fund is providing good returns. Top-Up can be made after 1^st policy year and not in last 5 policy years. The minimum Top-Up in LifeTime Premier is Rs 2,000.

Switch: Switch is made to transfer the fund value from one fund to another. You can make four switches per year and additional switches can be made by paying Rs 100.

Partial Withdrawal: If policyholder is above 18 years and the minimum amount is Rs 2000 and maximum amount is 20% of fund value. One partial withdrawal is free per year.

Grace period: LifeTime Premier can be renewed within 30 days from the premium due date. Additional 30 days are given after notice has been sent to revive or discontinue the policy.

Free Look Period: LifeTime Premier plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.

How can I buy LifeTime Premier?

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Policybazaar representatives will assist you in buying LifeTime Premier.

What’s Policybazaar opinion on LifeTime Premier?

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LifeTime Premier is a plan with many benefits. There is lot of flexibilities like increasing the Sum Assured, loyalty additions and limited pay. If you are busy person, trigger portfolio strategy is also excellent way in which your fund is secured gradually. You can also anytime switch to fixed portfolio strategy.

For buying LifeTime Premier, click here.

What is Net Asset Value in ULIP?

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Unit linked insurance policy invests the premium in equity or debt market or both. The premium is allocated in the fund of your choice. The fund has particular value associated to it which is better known as Net Asset Value.

Net Asset Value is the market value of the fund less the liabilities divided by total number of units.
NAV on any current day is equivalent to assets minus liabilities divided by total outstanding units.

Illustration:

100 people invest Rs 55 each in ULIP plan. After initial charges have been deducted, Rs 50 are left per person, which are invested in a new equity fund. The amount i.e. Rs 5,000 is invested in distinct portfolio of that fund.

NAV at beginning= 5000/100= 50
NAV at the end of day= Market Value of fund- liabilities/ no of outstanding units.
Assuming small growth, new NAV at end of day= 5250-50/100= 52
And hence NAV per unit per person is Rs 52.
One should always keep an eye on NAV since it directly tells about the growth of the invested amount.

How does NAV help me?

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Before buying a ULIP, take a look at NAV of the funds available with the particular insurer. The NAV will tell you about the growth the fund has been getting. A recently launched fund would typically have less growth as compared to older funds which have experienced the ups and downs of the market.

Example: An insurer has equity fund with NAV of 12. The fund has been operating from 5 years and the growth has been 20% which is considered very well. Another fund NAV is 9 and has been operating from 8 years that means the growth has been negative. So you can invest money by looking at the fund’s NAV.

Combination of Mutual Fund and Term Plan or ULIP:

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It is wide belief that combination of mutual fund and term plan is more beneficial than buying a ULIP. A term plan will provide with the necessary protection while the mutual fund with less charges will give more returns. The idea of the combination is good but one has to further understand the implications to make the decision:

Objective: One buys ULIP with particular purpose be it future education of child, pension plan. Mutual fund has entirely different objective i.e. to get return on investment only.

Guaranteed plans: Mutual fund returns are not guaranteed since they are dependent upon the market scenario. However there are guaranteed ULIP plans which offer minimum fixed net asset value. Even if the market falls, you are assured of those fixed returns.

Long term: Life insurance is for long term say about 20 years whereas mutual funds are for relatively less time period.

Comprehensive Security: In case the life assured passes away, many ULIPs not only provide with the risk cover but also waiver of premium till end of policy term which means complete maturity amount, family income benefit etc. A term plan will just provide the cover and mutual fund will provide with the concurrent fund value.

Costs: It is probable that combination of mutual fund and term plan is cheaper but you get additional benefits with ULIP’s.

Flexibility: Mutual funds are more flexible in terms of liquid cash as they can be withdrawn anytime. ULIP’s have lock-in period of five years.

The combination of term plan and mutual is certainly a good option. You get good cover and charges are less in mutual fund. However what ULIP offers is much more benefits as discussed above. Ultimately, it will depend on your needs both in term f short term and long term.

Life Insurance vis-à-vis Mutual Fund

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There has been a lot of debate whether one should invest in life insurance or mutual fund. One side promotes life insurance as your ultimate investment option while the other side promotes mutual fund.
Life insurance and mutual funds are similar in some aspects.

Similarities:

• Both life insurance and mutual funds invest in equity or debt market
• Both life insurance and mutual fund provide tax benefits

However despite the fact that recent changes in life insurance might make life insurance and mutual fund seems alike, there is fundamental difference between the two.

Difference: 

• Life insurance has its basis as protection product whereas mutual fund is defined by its investment portfolio.
•  Life insurance is insurance policy which offers combination of security and investment. Life insurance provides you with a risk cover as well as investment options. The investment options vary from traditional money back policies to the popular ULIP’s. Mutual fund invests your money in equity or debt market and offer return on investment accordingly. Mutual fund is only investment tool and hence there’s no life cover with it.
•  Mutual fund has low charges as there’s no charge at the start of fund if you buy directly from company. There are also less charges if you surrender in initial stages. Life insurance provides life cover along with investment which makes it more expensive. Fifth year onwards, there are no surrender charges.
•  Mutual funds are short term compared to life insurance whose average policy term is 15-20 years.
•  Life insurance policies have lock-in period of 5 years whereas there’s no such thing in mutual fund
• Regular premium have to be paid in life insurance policies whereas your investment can be stopped anytime in mutual fund.
• Life insurance have many variants like money back policies, unit linked insurance policies etc. Mutual funds have fewer types.

Hence it is evident that major difference lie between life insurance and mutual fund. It is entirely dependent on your needs and requirements. Life insurance is your product if you looking for long term complete package of investment and security. Mutual fund is your product if you looking for investment option only.

What is Switch and Premium Redirection?

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ULIP is life insurance policy which invests the amount in equity or debt market. The allocated amount is put into fund of your preference. ULIP’s have two flexible options to manage your funds- switch and premium redirection.

Switch allows the policyholder to shift the total number of units from one fund to another. Normally, every premium is allocated into the funds in the same proportion chosen by you during the commencement of policy. But in case you want to transfer your units from one fund to other, you can do it by switching option. The insurer often allows few free switches in a year and additional switches attract nominal fee.

Premium redirection lets you allocate all the future premiums in different funds than chosen by you during commencement of policy. The existing units will not be shifted and continue to stay there.

Illustration: Mr. Bose noticing bullish market scenario puts money in equity fund. However with changing market scenario, he switches a portion of existing units to debt fund. After a year, Mr. Bose uses premium redirection to direct all future premiums in equity market.

What are Day Care Procedures in Health Insurance?

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Health Insurance covers the medical expenses when the insured is hospitalized for more than 24 hours. Health insurance also covers Day Care Procedures. Day Care procedures are surgeries or procedures which do not require hospitalization and can be finished in few hours because of technological advancement. It’s very important to find out how many day care procedures are covered by particular insurer. Some insurers cover limited day care procedures while other insurers cover almost all of the day care procedures. Some of the day care procedures are chemotherapy, radiotherapy, incision of the prostrate, incision of the cornea, stapedotomy, nasal sinus aspiration etc.

Illustration: Mr. Joshi aged 62 years has cataract problem. He undergoes treatment which lasts just a few hours. The insurer reimburses the insured for the treatment.

What are pre and post hospitalization expenses in Health Insurance?

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Pre hospitalization expenses cover the medical expenses required for health examination and tests that occur prior to hospitalization. The consulting doctor might recommend some tests in order to analyze the patient’s health condition before proceeding to the required treatment. Pre hospitalization covers the costs of those expenses. The number of days covered for pre hospitalization varies across insurers but it’s usually 30 days.

Post hospitalization expenses cover the medical expenses that might occur after the hospitalization. The consulting doctor might want to track the recovery process by running some medical tests to determine the progress. Apart from diagnostic tests, there are doctor’s fees, pharmacy expenses which are covered under post hospitalization. The number of days covered for post hospitalization varies across insurers but it’s usually 30 days.

Both pre and post hospitalization expenses are part of health insurance and cover expenses incurred by the insured for limited number of days.

Illustration: Mr. Basu has to take treatment for some illness but some tests like blood test, ultrasound have to be done before hospitalization. The insurer will pay for these pre hospitalization expenses. After the treatment has been done, further medical expenses are also covered by the insurer for 30 days.

Tata AIG Wellsurance Review

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Plan Name: Wellsurance
Insurer: Tata AIG General Insurance Company Limited
Category: Health Insurance
Objective: Ensure good healthcare services of your preference

Major USP of Wellsurance:

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• Three variants to suit everyone’s need 
• Critical illness benefit

What are the features of Tata AIG Wellsurance?

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Critical Illness: The critical illnesses covered under Wellsurance are Cancer, First Heart Attack, Stroke, Kidney Failure, Coma, Coronary Artery Bypass Grafting, Major Organ transplant, total blindness, Paralysis, Multiple Sclerosis and Major Burns.

Hospital Cash: Additional cash is paid to the insured for miscellaneous expenses.

Convalescence Benefit: Additional amount is made available to the insured after five continuous days of hospitalization.

Tax benefits: You can avail tax benefits under Section 80D to maximum amount of Rs 15,000. For senior citizens, the maximum amount is Rs 20,000.

Tata AIG Wellsurance Variants:

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Wellsurance has three types and the benefits vary accordingly. These are:

Wellsurance Family: The additional benefit in Wellsurance Family is Education Benefit which varies from Rs 50,000 to Rs 200,000 as per the Sum Assured opted for. The Sum Assured available with Wellsurance Family is Rs 2, 3 and 4 lacs.

Wellsurance Woman: The additional benefit is cosmetic reconstructive surgery if the insured is involved in accident. The coverage amount varies from Rs 50,000 to Rs 200,000. The Sum Assured for cancer is Rs 3, 5 and 7.5 lacs. For other critical diseases, the Sum Assured is Rs 1.5, 2.5 and 3.75 lacs respectively.

Wellsurance Executive: The additional benefit is the coverage for minor and major surgeries. The Sum Assured for critical diseases is Rs 3, 5 and 7.5 lacs.

What is not covered in Tata AIG Wellsurance?

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Wellsurance, a comprehensive health plan does have some exclusions which are:

- Any pre existing disease is not cover nor any complication arising from it

- Treatment for internal and external congenital diseases

- Non allopathic treatments

- Cosmetic treatments or plastic surgery

- Abuse of intoxicant things like alcohol or drugs

- Self inflicted injuries

- Mental Disorders

- Act of war, nuclear war or radiation

There are few more exclusion’s which can be verified from the policy document.

Who can buy Tata AIG Wellsurance?

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Wellsurance can be bought by anyone aged from 18 years to 65 years. Children from 6 months to 18 years can be covered under same policy. Wellsurance Executive and Woman can be renewed lifelong.

How much premium for Tata AIG Wellsurance?

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Mr. Narula aged 30 buys Wellsurance with Sum Assured of Rs 3 lacs. The annual premium is Rs 3,583.

Policybazaar view on Tata AIG Wellsurance:

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Wellsurance has been specifically designed for critical illnesses. The treatment of critical illness can be very expensive which Wellsurance covers. Special consideration has been made to the needs of customers in the form of its variants. The coverage of major and minor surgeries is also excellent benefit in Wellsurance Executive.