With their low-risk and high-return possibilities and easy switch options, New-age Unit-Linked Insurance Plans (NULIPs) offer a great solution to investors who worry about volatility in the market and prefer to hedge their investments. Targeting the new fourth-generation or 4G population and lure them to start early on their investment journey, NULIPS have greatly reduced most charges, including premium allocation, policy administration, fund management, and mortality. Most insurers have capped the fund management charge at 1.35 per cent of the fund’s value. This is deducted before computing the net asset value of the fund. Nowadays many insurance companies are also returning the mortality charges at the time of maturity. Hence these taxsaving investments are also offering a good value for your money.
It is but natural for any reduction or abolition of charges to sow doubts in the minds of potential investors on the feasibility of the plan or the insurer. After all, there’s never a free ride and someone has to pay for all the discounts and sops.
Casparus Kromhout, MD and CEO, Shriram Life Insurance, rightly points out, “Waiver of charges would lead to an increase in return for ULIP holders but that would also reduce the income components of insurance companies.”
A layperson cannot fully comprehend the functioning of these financial instruments. Therefore there is a brewing concern of hidden components insurers might levy to compensate for the reduction in regular charges. Allaying fears, experts, however, stress that these are transparent investment options.
Esta historia es de la edición February 2021 de Outlook Money.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición February 2021 de Outlook Money.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
Gold ETFs And FoFs
While Indians love to invest in physical gold, even mutual funds offer the option, but in paper format.
PLANNING TO BUY CHILD INSURANCE? THINK TWICE
Child insurance plans combine insurance and investment but often offer low returns due to high costs, making a combination of a term insurance cover and mutual fund a better option for securing your child’s higher education needs
How Do You Define Happiness?
Money does buy happiness, but after a while, the appeal fades. We talk about our relationship with money, but, maybe, it’s time to revisit our relationship with happiness
Avoid Crypto As It Is Highly Volatile
I am 22 years old and have recently started working. I want to invest a small portion of money in cryptocurrency. How should I go about it? Does it require a huge capital investment?
Invest Right, Don't Speculate
The lure of high returns and quick gains from equity tips, cryptocurencies, and equity F&O can be enticing. But remember, return of capital is more important than return on capital
The Wedding & Budget: Is Minimalist Trend The Right Knot For You?
Indian weddings are known for their pomp and grandeur, but minimalist weddings are also in vogue now. Dia Mirza was one such celebrity who went for a minimalist wedding. If you also want to keep things minimal on your big day, here’s how to do it
Here's How To Buy An ETF?
Mutual funds are the preferred choice for retail investors. However, they come at a cost and fund management risk, apart from other risks. A smarter alternative is to invest through ETFs.
How Passive Funds Help Diversify
Passive funds provide a simple way to invest in broad markets as well as in specific themes and sectors, making them ideal for an investor's satellite portfolio
The Rise Of Passive Funds
The popularity of passive funds among retail investors has risen post Covid, and fund houses are out with many variations of ETFs and index funds. Does this category present a new opportunity for investors?
Tax Reforms: What's In Store?
The government is working on reforming the existing Income-tax Act, 1961. The impending reforms have raised many questions in the minds of taxpayers. Will the old regime and deductions be done away with? Will it really simplify your life? What's the need for these reforms? We try to answer these and other questions regarding tax reforms