If we think charges are the main concern in ULIP and we should not go for it, I don’t think so it will be a nice move. lets take step by step:
Fixed Deposit: If u will really going to invest here please remember one thing the profit you get from here is taxable mean you have to pay tax on its profit so the final profit you will be getting will be the half of actual one.
Mututal Fund: A very nice device to grow faster if you can bear risk and have no problem in loosing out some money. It has entry load of 2.5%. In mutual fund if the share market is going down you have no choice to make sfe your money. It will go as per the market or you have foreclose it. 3 Yrs. locking period time is there. Meaning you can take out some money if you want.
Insurance Term Plan: It is a nice device for those who already having so much of investment and want to rise their risk cover it will give nothing in return. Just a pure investment device which cover financial status of your family after your death will also provide you income tax return benefit under sec 80C
ULIP: Unit Likned Insurance Plan, Gives you facility like Income Tax Benefit under Sec 80C and 10(10D), Risk Cover, Investment which is secure, how it is secure? well in ULIP you have option of switching fund every ULIP plan has atleast 3 FUND for your choice of growth and how safe you want to play. that mean you have control over your investment if market is going down you can use a fund which will give facility of switiching your money from share market to debt which gives atlest 8 to 10% fixed return. vice versa if market is going up you can have the benefit of switching it to growth fund where you can put your money maximum in share market. Major charges of ULIP’s are Allocation charges, Fund Managmenet Charges and Admin charges, in every plan boucher the charges are very much clear, so you just have to see where these charges are nill for example in Brila Dream Plan there are no allocation charges all other charges are applicable but after three year locking period they get reduce. In Kotak Smart Advantage: there is no allocation charges no Fund Managment Charges only Admin charges exist. just think about ULIP gives you advantages more then any other investment device and return currently they are providing more then 13% percent and you just have plan accordingly that can be done after a financial consultancy over it. people who says there are very much charges just because they have taken this device blindly and by not going through the broucher. and they don’t even know that if there is something really wrong they can get there money back 100% within 15 days from the date you have received the Policy BOND.
For further clarification please feel free to write me on: salim_ahmed@in.com