Originally Posted by parveen009
Great Work!!!!! Can you put more light of HDFC HDFC Unit Linked Pension Plus? Its merit and de-merits........
HDFC Unit Linked Pension Plus:
This plan by HDFC Standard Life Insurance offers nothing other than the benefit of any other ULIP offered by insurance cos. Just the name has been "Pension Plus"
This fund gives you the option to choose from 7 Funds. These are:
1. Liquid Fund Rs. 25.2514
2. Stable Managed Fund Rs. 25.5681
3. Sovereign Fund Rs. 22.8103
4. Secure Managed Fund Rs. 23.3505
5. Defensive Managed Fund Rs. 29.8017
6. Equity Managed Fund Rs. 57.1314
7. Growth Fund Rs. 75.4613
The rates given against each fund provides the current price of each unit.
In these funds the exposure to equity ranges from 0% to 100% depending on the choice of fund you makes. Liquid fund has no exposure to equity. And Growth fund has 100% exposure to equity i.e. in growth fund all your money may be invested in equity but in Liquid your money is invested in Govt. Securities or Bonds etc.
The return, as you can see from the price per unit, also varies. It is less for Liquid fund, but as exposure to equity increases so the price per unit.
It indicates that maximum exposure to equity in good especially in long term.
As the name suggest, this ULIP is Pension Plan. So, in my opinion, you will not need the money prett soon, i.e. you will need the money say after 25-30 years. So, I will suggest that you opt for Growth Fund.
Minimum entry age is 18 years and maximum is 65 years.
Minimum term is 10 years and maximum is 40 years.
Vesting age is minimum 50 years and maximum 75 years.
you can get your money back as per Govt. Rules and regulations prevailing at the time of vesting.
On vesting you have following options:
1. Get 1/3 of your money in cash and rest in annuity.
2. You can continue the ULIP as annuity fund with HDFC or any other insurer.
In case of death, the nominee will get all the unit at prevailing unit price.
No surrender is allowed in first three years.
Charges are 0.80% per year Fund Management Charges.
Rs. 20/- per month as Policy Admn. Charges.
Other charges are irrelevant if you pay your premium regularly and leave all the mathematics to Fund Manager.
The main culprit in this ULIP is Premium Allocation Charges
. In first year, you will get only 50% allocation and there after 99% allocation. Means the premium paid in first year will be equal to half the units allocated.
You will get tax deduction upto Rs. 100000/- u/s 80CCC. Mind you, this is tax deduction limit and not the investment limit in the ULIP. i.e. you can invest more than i lac but tax deduction available is Rs. 100000/-
In addition to this the co. will give you 0.10% bonus units at the end of every year.
Now, I have kept all the points for your scrutiny.
Now take an example
If you start this ULIP with Rs. 10000/- initial investment. Rs. 5000/- will be deducted as initial charges. And will charge Rs. 20/- per month as PAC. It works out to 0.25%. Add another 0.80% as FMC. Deduct 0.10% bonus units. it works out to 51% deduction from first year premium, which does not make any sense. Moreover according to this calculation, tehy will continue to deduct around 1.50% charges every year.
I will prefer ELSS over this plan. As they are more professionally manages and attracts no tax as Long Term Captial Gains is exempt after i year of holding and gives you the added advantage of Tax Deduction.
Now, my dear choice is yours, i have discussed all the merits and de-merits of the policy. Now it is up to you to decide whether to go for this or not?
Dear all, my explanation can be less understandable. Please correct me so that I can improve in future.
Comments are invited. Thanks.