Is it advisable to invest in Unit Linked Pension Plans (India)?

There are various schemes from Insurance companies called ULIPs and Pension Plans. There is a general notion that the initial ‘allocation charges’ are fantastic: even upt to 100% of first annual premium. Hence my question is: is it still possible to make money after paying hefty charges to the companies? Is it possible to get income greater than bank FD interest rates? I would prefer answers from people who actually lost or gained.

4 Replies to “Is it advisable to invest in Unit Linked Pension Plans (India)?”

  1. plz have a look on these things b4 investing

    1)allocation charges

    2)admin charge

    3)surrender charges

    for a good investment plan these charges should b minimum

    if u want to invest i can suggest u a plan which have allocation charge 2% admin charge 0%

    my mail id is [email protected]

  2. Dear Sir ,
    Your Income , age , liability are looked into before making any kind of investment . If u have already invested into ULIP , wait for at least 5-6 yrs before jumping into conclusion . The Pension plans are invested into market , Govt bonds or both . U have to decide where u want to get invested .
    For further assistance mail me at [email protected] or call me at 098702 89900 .
    Regards ,
    Kumar .

  3. Hi Suresh,

    Trying to make the answer as broad but still as suitable as possible.

    1. Should you invest in a Pension ULIP – It makes a lot of sense. It keeps us disciplined in investments, their is a good growth potential which should overcome inflation and provide decent real returns.

    2. What about charges – Of course charges do matter. a. The best way is to get into a Pension with no separate life cover. That takes care of the mortality charges. Almost all insurers offer such products. b. Also look at the other charges (allocation, fund management). You can check this in the Benefit Illustrations for the final fund value at 10%. Whichever insurer gives a higher value has the lower charges. Beware of special offers like 300% guaranteed returns on premium etc. They might not be worth.

    3. When should you go for Pension ULIP – If you have at least 10 yrs to retire, which means you will invest for at least 10 years, Pension ULIPs are the good. Thus if you are below 50 yrs of age, assuming you will retire at 60, you should start investing in Pension ULIP. FOr any term below that, Pension ULIPs will be less helpful. The best is to start when you are 25-30. More the tenure, better are the returns.

    4. Is it possible to make money – Yes, it is definitely possible. From Jan 1st, 2010, insurers will come out with new ULIP Pension products, adhering to IRDA guidelines on max charges possible. You should look at those before investing. 1-2 months research will always be helpful.

    5. Bank FD’s – are a little less helpful as Pension products. Very few schemes give you tax benefits (5 yrs FDs to be precise) , and you never know what the rate of interest would be after 5 yrs, so anyways you are open to that risk.

    6. Compare – Compare ULIP pensions before buying. LIC is good and so is SBI Life, ICICI Pru etc. You can do so at, if it helps. mentioning this one, because that is the only online pension plan comparison service in India as of today.

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