Wednesday, February 4, 2009

Max New York Life 'Life Maker Unit Linked Investment Plan' - Risk Element

Most of the readers of Financial Planning articles would know that ideally you should have your Investment and Insurance separate. But because of the lack of financial knowledge or aggressive marketing campaign and aggressive follow-up by agents most of the people tend to take ULIP plans. But I would say at least it's better that you started thinking of Insurance and investments which most of common man don't even think in there busy day to day life.

Following is an example of ULIP plan from Max New York Life the plans name is Life Maker Unit Linked Investment Plan - Risk Element.

This plan the allocation is 50% in Balanced Fund and 50% in Growth Fund.
Out of investment of Rs 1499.94
Balanced Fund investment is of Rs 581.28 and Units alloted are 35.926 at the rate of 16.18
Growth Fund investment is of Rs 581.25 and Units alloted are 30.337 at the rate of 19.16 as on 18/12/2008

so the total investment is of (581.28 + 581.25 = 1162.53 ) so out of Rs 1499.94 your actual investment is of only Rs 1162.53 and the remaining Rs 337.44 which is almost 22.5% of total investment has gone for various charges such as admin charges mortality charges etc.

so you can make your own conclusion how good is this ulip plans where charges are as high as 22.5%

TIP: If you have taken similar policy then you can maximize your returns by using the switch option and rebalance yours investment. If the markets are down and you think it will go up in the future then allot maximum investment towards Growth portion and when the markets are at high then you can move the maximum investments towards Balanced option.

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