Reliance life insurance has recently launched Classic Plan II. Let us see is there anything new in it to attract investors or is it old wine in new bottle?
Ongoing through its official brochure, the plan seems to be simple ULIP – you pay premium, the company deducts charges from it like premium allocation charges, mortality charges, fund management charges, service tax etc. and will invest the balance amount in the fund chosen by you.
The premium allocation charges are 30% (excluding service tax) in the first years, which is HUGE.
The other charges are same like in any other ULIP Plan. But the point here is why should one pay such a huge premium allocation charges?
It's better to invest in online term insurance policies to cover life risk and invest in equity mutual funds, PPF, Gold to create wealth in long term. After all, this premium allocation charges are going in the hands of agents, sales team etc. and not in your portfolio in either way.