New ulip guarantees best nav during term
Bajaj allianz Life Insurance Co. Ltd has launched a guaranteed unit-linked insurance plan (Ulip) called Bajaj Allianz Max Gain. The Ulip offers two sets of guarantees on maturity of the policy.
The first guarantee is that it offers the highest net asset value (NAV) during the term of the policy. This means that once the policy matures, the investor would get an amount that is equal to the number of fund units multiplied by the highest NAV during the entire term of the policy.
The second guarantee that this Ulip provides is that it bumps up the maturity amount by up to 350% of the total allocation charge that is deducted every year during the term of the policy. However, there is no allocation from the third year onwards. In the first two years, the allocation charge varies between 6% and 20% of the premium.
This plan is a regular premium paying one with a minimum investment amount of Rs25,000 per year. The sum assured is fixed at five times the annual premium. The plan gives flexibility to its customers to increase or decrease the premium and there are no surrender charges.
The guarantees are not available if the policyholder dies during the tenure of the policy. The policy pays either the sum assured or the fund value, whichever is higher, as death benefit.
IDBI, too, out with teaser?home?loan rate
Another bank has joined the teaser home loan rate bandwagon. Industrial Development Bank of India Ltd (IDBI) has launched a special home loan scheme, which will give home loans at a fixed rate of 8.25% per annum till March 2012 across all loan amounts. Thereafter, it will float the interest rate at the prevailing bank rates.
At present, the applicable floating rates for the bank are 8.75% per annum for loans up to Rs30 lakh, 9% per annum for loans between Rs30 lakh and Rs50 lakh and 9.25% per annum for loans above Rs50 lakh.
C.S. Jain, head (personal banking), IDBI, says, “Under this scheme, all other parameters for availing a loan are the same as that for other home loans offered by the bank.” All new customers can avail the rate on or before 31 March. The loan needs to be disbursed, full or part, during the offer period.
With this the tally of banks offering teaser rates goes up to 20. Three housing finance companies are also offering these rates.
ICICI pru’s medium term plan changes focus
ICICI Prudential Asset Management Co. Ltd’s Medium Term Plan has changed its objective. It can now invest up to 100% of its corpus in money market instruments (short-term scrips) and also long-term bonds. Earlier, the fund could invest only up to 40% in shorter duration papers. As the fund house expects interest rates to go up shortly, it now has the flexibility to behave like a short-term or even a money market fund. When interest rates rise, prices of debt securities fall, and vice-versa, as there is an inverse relationship between interest rates and market prices of debt securities.
While the change in its mandated asset allocation merely opens up an option for the scheme, and does not necessarily mean an immediate change in its portfolio, the fund is getting ready to face a rising interest rate market.
On the face of it, the fund is reducing its risk profile as it can sell off its medium- and long-term bonds and get into cash in a volatile or rising interest rate scenario. But the fund manager’s call to time the interest rate movements will be crucial for the fund’s success.
You could either stick around if you find comfort with the fund house’s style of dynamically managing debt funds. If you want to opt out, do so before 11 January as you won’t have to pay any penalty before that.
—Kayezad E. Adajania