Mutual Fund vs ULIP over a 7 year period

[abdriver2000]

Recently there are ULIPs launched by LIC as well as private players which pay out the highest NAV reached by the end of 7 year term. Has anyone compared these with a equity MF?

ULIP will have several charges to begin with, but promises payout at the highest NAV reached.
MF does not have any charges, but the NAV at end of the 7th year may not be the highest.

I know many people would say that we should keep insurance and investment separate, but I would like to know if there is any analysis or data available which can help me compare better.

Mods can move this thread if it is not under the correct category.

 

[AW10]

Does this new ULIP policy comes with higher premium, less % of premium allocated to capital appreciation in initial years, higher charges of various nature etc.

I most cases, people will not care of such hidden tricks that Fin Institues use while designing a financial product. It is nicely marketed to address the right psychological points of buyer. I will certainly like to know the finer details and do the comparision myself.

 

[nac]

I have one suggestion.

Don't look for more returns with insurance companies.

Go to insurance companies if you wanna insure something rather than returns. We have got many instruments to seek for returns. Starts with bank deposit to equity, derivatives trading...

 

[abdriver2000]

For comparison's sake, we can compare the new LIC Wealth Plus ULIP with say HDFC Top 200 Fund.

 

[abdriver2000]

I found my answer at this link > http://new.valueresearchonline.com/story/h2_storyview.asp?str=101309

 

[AW10]

Thanks for sharing the answer of your query.
I do agree with what author has written there.

This products are nothing but another nice way to capture the Human Emotion of "investing in market with NO Risk". The locking period give nice cushion to fund mgmt company as they have assured funds in their hand for long period which can be used by them internally between their own funds to meet their own objectives.

In my view, return and risk goes hand in hand. Low risk, low return or higher risk,higher return. So rather then avoiding the risk (which is inevitable), we should learn how to manage the risk.

Happy investing.

 

[nikrod]

For highest NAV funds the equity allocation in initial years will be more. Fund managers will keep reducing equity part & increasing debt part over the years. This strategy will no doubt will result in achiving funds goal --> that of providing highest NAV.

I think overall returns of these funds will be much lower than pure equity or even balanced funds.

 

[magnet]

Some more links to help understand

http://www.personalmoney.in/is-your-agent-mis-selling-ulips-to-you/847

http://www.dnaindia.com/money/report_best-to-stay-away-from-guaranteed-nav-plans_1319379

 

[Kunal Nebhani]

Hello friends,
Well I would just like you all to view the review which is been given by a CFP please go through the link.Secondly its not so that ULIP don't give returns...They are good ULIPS in the market which consist of 23 companies...But a smarter way is to find out the best one.Well for that one needs to understand the "Need" of yourself and then seach for better one.Remember The one that is cheaper product doesn't mean it will give you better results.
Well the link is:http://www.jagoinvestor.com/2010/03/review-of-lics-wealth-plus-how-agents-are-miselling-it.html