Why To Worry About 25% Of ULIP Money In G-secs?

Are you aware that the new recent proposal of investing 25% of Unit Linked Insurance Plan (ULIP) in government securities (G-sec) is mandatory? This proposal, if approved will limit your options to invest in pure equity funds. Insurance companies fear that it might make policyholders apprehensive about investing in ULIPs, as they would no longer give high return on investment (ROI). On the other hand, if this proposal is rolled out, it would, therefore, change the dynamics of this product.

Read more
kapil-sharma
  • 4.8~ Rated
  • 7.7 Crore Registered Consumer
  • 50 Partners Insurance Partners
  • 4.2 Crore Policies Sold

ULIP Plans

  • Plan starting from ₹1,000/month
  • Save upto ₹46,800 in Tax under section 80C^
  • Zero LTCG Tax
  • In built life cover
We are rated~
rating
7.7 Crore
Registered Consumer
50
Insurance Partners
4.2 Crore
Policies Sold

Top performing plans with High Returns**

Invest ₹10K/month & Get ₹1 Crore# on Maturity

+91
Secure
We don’t spam
Please wait. We Are Processing..
Your personal information is secure with us
By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs #Discount offered by insurance company
Get Updates on WhatsApp
We are rated~
rating
7.7 Crore
Registered Consumer
50
Insurance Partners
4.2 Crore
Policies Sold
Disclaimer: #The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

Top ULIP Funds
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
8,243 Cr
Returns
27.08%
Returns
31.03%
Highest Returns
Returns
19.07%
Get Details
3,314 Cr
Returns
18.48%
Returns
25.67%
Highest Returns
Returns
16.35%
Get Details
6,109 Cr
Returns
20.05%
Returns
21.88%
Highest Returns
Returns
15.45%
Get Details
38,633 Cr
Returns
18.03%
Returns
22.29%
Highest Returns
Returns
15.29%
Get Details
2,845 Cr
Returns
17.48%
Returns
21.75%
Highest Returns
Returns
14.99%
Get Details
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
843 Cr
Returns
18.17%
Returns
19.68%
Highest Returns
Returns
14.78%
Get Details
268 Cr
Returns
13.57%
Returns
15.22%
Highest Returns
Returns
11.99%
Get Details
365 Cr
Returns
12.46%
Returns
13.33%
Highest Returns
Returns
10.9%
Get Details
559 Cr
Returns
9.99%
Returns
12.09%
Highest Returns
Returns
10.62%
Get Details
323 Cr
Returns
10.97%
Returns
12.51%
Highest Returns
Returns
10.54%
Get Details
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
237 Cr
Returns
7.32%
Returns
8.04%
Returns
8.42%
Highest Returns
Get Details
811 Cr
Returns
6.09%
Returns
6.81%
Returns
7.84%
Highest Returns
Get Details
478 Cr
Returns
5.8%
Returns
6.79%
Returns
7.62%
Highest Returns
Get Details
231 Cr
Returns
7.32%
Returns
7.89%
Highest Returns
Returns
7.53%
Get Details
895 Cr
Returns
6.07%
Returns
6.59%
Returns
7.52%
Highest Returns
Get Details

Disclaimer :
Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

What are ULIPs?

ULIP funds are market-linked insurance products that combine the benefit of insurance and investment under a single plan. There are various types of unit linked investment plan and the premium you pay is primarily divided into two parts. While the first part goes towards the cost of life cover, the second part is invested in debt, equity, or hybrid funds. As of now, it permits a minimum investment of 80% in equities.

ULIPs are considered as one of the best investment options due to following benefits:

  • Flexibility to chose and switch between funds

  • Complete transparency in structure, charges, and features

  • Additional covers can be taken by opting for riders

  • Various fund options to suit both risk takers and averters

  • Different premium paying frequencies

  • Dual tax benefits available under sections 80C, 80D, and 10 (10 D) 

However, the latest draft guidelines from the Insurance Regulatory and Development Authority of India (IRDAI) attacks the very first feature of the above mentioned list and restricts choice by mandating that at least 25% of ULIP funds be invested in central government securities (G-secs).

Rationale Behind Proposing New Guidelines

The proposal of 25% investment in G-Sec has a noble cause of financing long-term infrastructure projects, thereby providing much needed boost to government’s infrastructure projects. However, it could have repercussions on ULIPs, given that this product has witnessed many ups and downs in the past. Investors looking for pure equity funds may not be interested to continue with ULIPs, as the proposed recommendation will force them into a product that is likely to generate less than 8% returns. A 25% investment in government securities does limit the risk but this may have other repercussions, as many policyholders looking for pure equity funds may not be interested to continue.

Effect of This Proposal on ULIPs

ULIPs were never on the top of investors’ list and if the draft proposal is accepted, it would further slow down its growth prospects. As part of ULIPs, insurance companies offer four main fund options— debt, balanced, secured, and equity funds. If each fund has to meet the terms with the mandated 25% investment in government securities, there will be no equity funds. As a result, many investors will not prefer buying ULIPs and insurers will find it tough to sell the product to investors wanting 100% equity exposure. By making a 25% exposure to government securities mandatory, limited investment options will be available.

Invest more and Get more with ULIP Plan Invest more and Get more with ULIP Plan

Conclusion

The IRDAI proposal has been drafted keeping in mind the interests of the government and not the consumer. Mandatory investment in government securities takes away the customer’s choice and it could hurt fund returns as well. Those looking for pure equity funds for higher returns might not be able to do so if the proposal is accepted. Ideally, a customer should be allowed to make an investment in funds of their choice. Forcing them to invest in certain types of securities is not a good practice. In addition, there is no need to have a separate 25% investment clause when there are traditional plans that offer the guaranteed return option.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

Grow your wealth & meet your Financial goals

Systematically Invest in high growth plans with returns upto 18%*
View plans
Standard T & C Apply*
Invest More Get More!
You Get
₹1 Crores*
You Invest
₹10K/month
You Get
₹80 Lakhs*
You Invest
₹8K/month
You Get
₹50 Lakhs*
You Invest
₹5K/month
capital guarantee
Investment Calculator
  • One time
  • Monthly
/ Year
Sensex has given 10% return from 2010 - 2020
You invest
You get
View plans

Ulip plans articles

Recent Articles
Popular Articles
14 ULIP Charges You Should Know About

14 Nov 2024

When investing in Unit-Linked Insurance Plans (ULIPs), it’s
Read more
Top-Up Premium in ULIP

11 Nov 2024

A top-up premium in a ULIP (Unit Linked Insurance Plan) allows
Read more
Sum Assured in ULIP

05 Nov 2024

Sum Assured in a Unit Linked Insurance Plan (ULIP) is the
Read more
Partial Withdrawal Feature in ULIPs

19 Sep 2024

ULIPs offer a flexible feature known as partial withdrawal. This
Read more
SBI Life Smart Platina Plus

09 Sep 2024

SBI Life Smart Platina Plus is a life insurance savings plan
Read more
ULIP Calculator
  • 08 Oct 2018
  • 128380
A ULIP Calculator is a financial tool designed to help you compare ULIP plans and estimate the maturity amount
Read more
SBI Life Smart Platina Plus
  • 09 Sep 2024
  • 26235
SBI Life Smart Platina Plus is a life insurance savings plan designed to provide financial security and income in
Read more
SBI Life Smart Privilege Plan: Benefits & Features
  • 11 Jan 2017
  • 104982
SBI Life Smart Privilege is a unit-linked, non-participating life insurance plan offered by SBI Life Insurance
Read more
Tata AIA ULIP Plan Calculator
  • 07 Feb 2023
  • 8338
A Tata AIA ULIP Plan Calculator is a premium and returns calculation tool that helps easily and quickly compare
Read more
SBI Life Smart Platina Assure
  • 23 Aug 2024
  • 3377
SBI Life Smart Platina Assure is a life insurance savings plan that offers guaranteed returns. It's a non-linked
Read more

top

Become a Crorepati

Invest ₹10K/Month & Get ₹1 Crore returns*

Mobile +91
*T&C Applied.
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL