How is Bajaj Igain policy(online ULIP)?

I came across a new ULIP from bajaj i.e. igain which is available at following website
Could you please analyse the policy & advice if it is worth to invest in it.

How is Bajaj Igain policy(online ULIP)?
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One Reply to “How is Bajaj Igain policy(online ULIP)?”

  1. After looking at the product documents, I can only say that it is the best ever ULIP I have ever seen, still I want to say that do not compete with mutual fund.

    Positive aspects

    1. Effectively zero(or negetive) allocation charges.
    They charge 5% in year 1 if premium is between 5K-25K & 2% if premium is 25K-200K & zero above that. It is only possible because there is no agent in between you & company. Even you get 102% allocation for your premium in year 11-20 so if you calculate on excel sheet, you find that more then first year allocation charge (with interest) is returned to you in year 11-20. (condition is that you pay till year 20) so I can say that policy has zero allocation charge.

    2. Unlimited topup is allowed.

    Unlimited topup is allowed at zero topup charge but you will have to pay for additional top up cover .(dont mind paying for any insurance cover if you are underinsured)

    3. Unlimited switches are allowed.

    Now come to negetive aspects

    1. Policy admin charge – On higher side if premium is more then 15K.

    Monthly charge in first year is in range of Rs 50-100 (basicly it is .5 % of premium but with min/max of 50/100). It also escalate at a rate of 5% per annum. So following will be monthly admn charge in frst year

    Premium – PAC
    5K – 50
    10K – 50
    15K – 75
    20K – 100
    more then 20K- 100

    As unlimited topup is allowed, I advice you to take a policy with premium of 10K & then topup anytime with whatever amount you want. I did not advice for 5K as insurance is limited to 20 times premium & it will be only 1Lakh in case of 5K. If you pay 10K then insurance will be 2 Lakh & you will pay same PAC of 50Rs.
    If you want to buy higher insurance(dont have term plan) then you should opt for premium in range of 50K. Then still you pay rs 100 admin charge monthly but you can buy higher coverage (10L in case of 50K premium).

    2. If I compare the return of Igain & Mutual fund for a longer term of 20 years then also I find that mutual fund gives better return.

    To calculate return of Igain, I am reducing the charges & then calculating return . allocation is 86-93% if you pay 10K premium & 94-98% if premium is 50K (that is why I dont like ULIP)

    To calculate Mutual fund return, I am reducing the annual return by .5% as Fund management charge of MF is 2.25% compared to 1.75% of many Igain funds. Also I am not reducing any entry/exit load as I assume to invest directly/online.

    I dont mind paying the mortality charge as it goes towards providing me insurance so I am not reducing in Igain.

    On calculating it on excel sheet, I found that mutual fund return is 5-7% higher in longer run. The difference is reduced as premium is increased.

    I can not comment on the return given by MF & ULIPs as no one knows the future but can say that Igain is the best ever ULIP I found (though not better then Term insurance+MF+PPF combination.

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