Advice required on ICICI LifeTime Super Pension

#1
Dear Sir,
I have taken the pension plan ICICI LifeTime Super Pension plan 3 years back .ie. Nov. 2007. I have select Flexi Growth Option II as the fund to allocate (100%). The premium is 1 Lakh per annum for a tenure of 17 years. During 2007 the market was performing high. The premium allocation charges (PAC) for this plan charged by ICICI are as follows,
Year 1 - 14%
Year 2 - 9%
Year 3-10 - 1%

Till now I have paid 3 lakhs in total as premium for 3 years. Now after the recent stock market crash my kitty stands at around 2.91 lakhs. I think a major portion of this loss is attributed to high Premium allocation charges of ICICI. Is it wise to continue investing in this fund over a long term or should I withdraw the funds now and allocate them in diversified mutual funds or some good ELSS scheme?
Thanks,
Siva
 
#2
I, too, have taken LifeTime Super Pension policy from ICICI Prudential. Since beginning I parked the premiums in Balancer fund. I do Rs. 5K per month premium. I have been doing this since last 5+ years (so, I've invested more than 3 lacs so far). Currently, my fund value is 20% up (after all deductions) than my total invested premiums. I track it in moneycontrol.com portfolio tool. In last 5 years, my policy has seen a bull run till end of Jan 2008, a bear run till Mar 2009, another bull run till Jan 2010, and I think we are on the verge of another bear run till 2010-end. This is the only policy that is green in my portfolio. All other policies from ICICI, Reliance, Kotak are in red, pathetically! The primary reason, I believe is their annual premium paying mode. Monthly premium mode has advantage of better rupee cost averaging and thus have higher probability of staying in green in the long run.

Having said this, yes, ULIPs in general sucks! And, that too sucks big time!! Instead you should buy only term insurance and health insurance from the insurance companies, but never, never, never the savings or investments or wealth creation or pension or child plans or guaranteed returns or guaranteed maturity addition plans! Never do this!!! There is huge mis-selling that all insurance companies do to push for their first-premium sales. Never ever get into their traps.

You get term insurance of Rs. 50 lacs along with all important the riders for bare 15K (or even less) per year. Family floater health insurance of 5 lacs will cost under 7-8K per year, depending on your age and the number of children you have. So, having parked 22 to 27K per year for insurance, the remaining money should be allocated to diversified equity mutual funds, index funds, gold funds. This allocation should be done according to your short-term, mid-term and long-term liquidity requirements. No fund manager in the world understands your liquidity and ROI requirements better than you!
 

rajeshn2007

Well-Known Member
#3
To put it simple , Avoid ULIPs.
For insurance - take a term policy.
For investments - choose mutual funds/pick your stocks.
 
#4
Thanks a lot for both the replies. I appreciate it a lot.

What will be your top picks among
1. Diversified mutual funds - Give any top 3
2. Index funds - Give any top 3
3. Gold funds - Give any top 3.

Thanks and much appreciated.

Siva
 

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