Product crack: Future Generali Easy Invest Online Plan2 min read . Updated: 09 May 2016, 06:07 PM IST
This is a unit-linked insurance plan (Ulip), which means it invests your money in the markets
This is a unit-linked insurance plan (Ulip), which means it invests your money in the markets. This Ulip can only be bought online.
WHAT IS IT?
This is a regular premium plan, so you pay a premium every year throughout the policy term. The policy term and the premium paying term are the same. You can choose a policy term of 10-20 years.
This policy has five investment funds to choose from. The future income fund has no exposure to equities, whereas the future balanced fund has a 30-60% exposure in equities. The remaining three funds are equity funds with an exposure ranging from 50-90% to 80-100%. On maturity, the policy will pay the fund value. Also if the policyholder doesn’t want to collect the money as a lump sum, she can choose to stagger the payment over five years.
This is a type-I Ulip that pays the higher of the fund value or the sum assured to the beneficiary upon the death of the policyholder. The sum assured under this plan is fixed at 10 times the annual premium. During the policy term, death benefit would be the highest of these: sum assured, fund value, or 105% of all the premiums paid till date.
This plan also offers loyalty additions during the last five policy anniversaries. So, if you buy a plan with a policy term of, say, 20 years, after 15 years, the policy will add 1.20% of the average fund value of the last eight quarters to the fund value every year. This percentage varies from 1.10% to 1.20% and depends upon the policy term chosen.
HOW DOES IT WORK?
The premium allocation charge (which gets deducted from the premium) is 5% of the first-year premium. From the second till the fifth year, it is 3.5% of the premium. From the sixth year, there is no charge. The policy administration charge, which is deducted from the fund value, is 0.1% of the annual premium. This is deducted monthly and is a minimum of 50 and a maximum of 500 per month. The fund management charge is fixed at 1.35%. The insurance charge will depend upon your age and other factors such as the policy term.
Assuming a 35-year-old man buys this plan for an annual premium of 1 lakh for a term of 20 years, the sum assured would be 10 lakh. On maturity, assuming 8% growth, his maturity corpus will be around 41.19 lakh—a net return of 6.47%.
MINT MONEY TAKE
So far as type-1 Ulips go, this plan’s charges are competitive. You need to keep in mind that unlike other online plans that may not levy a premium allocation charge or policy administration charge, this plan charges both, but reimburses a part of that cost via loyalty additions.
A sum assured of 10 times the annual premium makes the insurance component in this plan weak. Being a type-1 plan, it returns higher of the fund value or the insurance amount, which is why Mint Money does not recommend type-1 Ulips. If you are keen to buy this plan, make sure your insurance needs are met and that you stay with the policy throughout its term.