Indians particularly tie up insurance with savings, hence it is not surprising that all companies have savings attached with insurance. Birla Sun life is no different. I had the courage and bad luck of pickiing up one of their policy 4 years ago. It is called whole Life... a just way of saying now you suffer your entire life... lets look at policy features:
1) I pay money (14000 P.a) for 25 years and get insurance for (1.5 lacs) for whole life (till I am 99)
2) I can withdraw amount after 25 years (or even before but foregoing some insurance benifit)
3) Gauranteed addition of 3% (if you choose maximizer which is risk prone but will give max returns)
Well now comes the things that they dont tell
1) they charge 65% as Premum allocation charges of your first year perimum (this is max of all companies ICICI charges only 20%)
2) Apart form the 65% for the first year they have policy adminstration charges every year 6.5%.
3) Apart from the above policy charges they charge Mortalilty charges the 1% to 5% every year
4) After all the above charges (if there is any money left in 14000) they would provide units in Enhancer ( Enhancer has 75% debt portion and 25% equity portion there is no 100% equity option).
5) The guaranteed 3% is not on the sum assured (like LIC ) but on the amount left over after all the charges
6) hey and did I tell you they have another Fund mangement charges every year 1 to 2% P.a. on the units.
7) Then they have another charge.... Astonishing how they can make up so many names (policy administration ) some 22 ruppees per month and this increases by 3% every year.
8) Am I going over board ... now comes another charge... they ran out of names.... hence it is just called annual charge... of 0.3% on the sum assured
Well guys after paying nearly 50000 for past 4 years and the being through the stock market boom, my policy value still is 50% of the my investment.... well blame it on me for not looking at all the charges. Now someone says that insurance is an added saving...
Bottom line: LOOK AT ALL CHARGES BEFORE YOU JUMP