Unit Link Insurance Investment?

I subscirbed to HDFC Standard Life Insurance Pension Plus Plan starting 2007 in order to secure a monthly income upon retirement next year. But it is an investment gone totally sour as the value of my investment is currently down by 35% and I am stuck to make al least another annual contribution otherwise I stand to loose the entire premiums paid (which is substantial). I realized only later that it was a very bad decision on my part to have invested in Insurance plan at such a late stage close to retirement age. What, if any, is the best option to get out of this mess to which I was lured by the glib talk of the so called investment manager (who surely talked me into it solely to get his hefty commission/reward by the Insurance company)?

Unit Link Insurance Investment?
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4 Replies to “Unit Link Insurance Investment?”

  1. go to the nearest branch and threaten then to take the case to consumer forum and an OMBUSDMAN who is a sort of judge from IRDA.

    there are times when private insurance companies to refund the first premium even after the free look period is over.

  2. Hi. I’m a Wealth Manager in Inference Wealth Management Services Pvt Ltd. Well ULIP is a bad investment considering all the charges they deduct from the premium. You cannot go and shout at the insurance company to pay your initial money back as you have signed an agreement and legally you cannot do anything except get whatever is the fund value.Investment managers of many companies are making a bad name for themselves in the industry because of their false practice. What i suggest you is that you dont get into further mess and consult a professional and not any company’s agent the so called investment managers.

  3. ULIP generally meant for long term investments more than 15 years. In your policy, first three years will be difficult by not seeing much money in the account because of the charges. After three years, more money will get added to your account.

    Remember, ULIP investments required patience because of its nature of long term than short term.

  4. Unit linked insurance plan (ULIP) is life insurance solution that provides for the benefits of risk protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time varies according to the value of the underlying assets at the time.

    In a ULIP, the invested amount of the premiums after deducting for all the charges and premium for risk cover under all policies in a particular fund as chosen by the policy holders are pooled together to form a Unit fund. A Unit is the component of the Fund in a Unit Linked Insurance Policy.

    The returns in a ULIP depend upon the performance of the fund in the capital market. ULIP investors have the option of investing across various schemes, i.e, diversified equity funds, balanced funds, debt funds etc. It is important to remember that in a ULIP, the investment risk is generally borne by the investor.

    In a ULIP, investors have the choice of investing in a lump sum (single premium) or making premium payments on an annual, half-yearly, quarterly or monthly basis. Investors also have the flexibility to alter the premium amounts during the policy’s tenure. For example, if an individual has surplus funds, he can enhance the contribution in ULIP. Conversely an individual faced with a liquidity crunch has the option of paying a lower amount (the difference being adjusted in the accumulated value of his ULIP). ULIP investors can shift their investments across various plans/asset classes (diversified equity funds, balanced funds, debt funds) either at a nominal or no cost.

    Expenses Charged in a ULIP

    Premium Allocation Charge:
    A percentage of the premium is appropriated towards charges initial and renewal expenses apart from commission expenses before allocating the units under the policy.

    Mortality Charges:
    These are charges for the cost of insurance coverage and depend on number of factors such as age, amount of coverage, state of health etc.

    Fund Management Fees:
    Fees levied for management of the fund and is deducted before arriving at the NAV.

    Administration Charges:
    This is the charge for administration of the plan and is levied by cancellation of units.

    Surrender Charges:
    Deducted for premature partial or full encashment of units.

    Fund Switching Charge:
    Usually a limited number of fund switches are allowed each year without charge, with subsequent switches, subject to a charge.

    Service Tax Deductions:
    Service tax is deducted from the risk portion of the premium.

    Source : iloveindia.com

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