Birla Century SIP plan! Investment plus Insurance

There is an offering from Birla Sun Life Mutual Fund called Birla Century SIP plan.
The Birla Century SIP plan claims to offer a unique combination of Investment through SIP or Systematic Investment Plan along with FREE insurance to the investor – FREE because the investor does not have to pay separately for the premium of insurance.

The benefits of Birla Century SIP plan are as follows:
• Wide Coverage: 18 years to 46 years for investor age group
• Cover continues till 55 years
• No medical check-up only a signed declaration of good health from investor
• The minimum investment monthly SIP amount is Rs. 1000 per month.
• Entry load of 2.25% and exit load of 2% upto 3 years and Nil from 3 year onwards.
• If SIP discontinues within 3 years of 1st installment: Life Cover ceases, If SIP discontinued after 3 years of 1st installment: Life Cover continues at fund value subject to maximum of 100 times monthly SIP value.

Insurance cover detail in Birla Century SIP plan are as follows
Year 1 – Insurance coverage till 10 times of Monthly SIP Installment
Year 2 – Insurance coverage till 50 times of Monthly SIP Installment
Year 3 onwards – Insurance coverage till 100 times of Monthly SIP Installment, that's why the name “Century SIP”. However, the maximum insurance value is capped at 20 Lakh Rs., irrespective of your SIP amount and investment horizon.

There are a few exceptions in which the insurance cover will not be available:
• Death due to suicide
• Death within 45 days of SIP start except when the death is due to accident
• Death due to pre existing diseases – this is the biggest and most ambiguous exception – in case someone dies of a disease like heart attack, there are always issues in proving that the disease was or was not pre-existing.

Its a very good option for investors who are looking for investment as well as insurance. Much better then your traditional insurance products or ULIP products.

Reliance SIP Insurance ! Secure your Financial Goals

Reliance SIP Insure facility is an add on feature of life insurance cover under Group Term Insurance to individual investors opting for SIP in the designated schemes. Reliance SIP Insure provides free life insurance cover to investors at no extra cost. In the unfortunate event of the demise of an investor during the tenure of the SIP, the insurance company will pay remaining unpaid SIP installments.

Reliance SIP Insure- Benefits to the Investor
* Inculcates Savings Habit
* Rupee Cost Averaging & Eliminates the need to time the market
* Free Life Insurance Cover
* Helps to complete the planned investments
* Maturity Proceeds at NAV based prices
* Flexibility Auto Debit from 4 banks namely ICICI bank, HDFC bank, AXIS bank & HSBC

Designated Schemes in which Reliance SIP Insure will be offered
1) Reliance Growth Fund - Retail Plan
2) Reliance Vision Fund - Retail Plan
3) Reliance Equity Opportunities Fund - Retail Plan
4) Reliance Equity Fund - Retail Plan
5) Reliance Equity Advantage Fund- Retail Plan
6) Reliance Regular Savings Fund – Equity option /Balanced option
7) Reliance Banking Fund
8) Reliance Pharma Fund
9) Reliance Media & Entertainment Fund
10) Reliance Diversified Power Sector Fund – Retail Plan

Eligibility: All individual investors enrolling for investments via SIP & opting for ‘Reliance SIP Insure’ Only individual investors whose completed age is greater than 20 years and less than 46 years at the time of investment. In case of multiple holders in the any scheme, only the first unit holder will be eligible for the insurance cover. Investment Details Minimum Investment per installment: Rs.2000 per month & in multiples of Re 1 thereafter. There is no upper limit however Rs. 5556 for 15 years will give you maximum cover of Rs. 10,00,000) Minimum Period of Contribution: 3 years and in multiples of 1 year thereafter. Maximum Period of Contribution: 15 years OR till attaining 55 years of age, whichever is earlier (e.g., a person can register an SIP of maximum 10 yrs at the age of 45 yrs.) The insurance cover ceases when the investor attains 55 years of age. Mode of payment of SIP installments is only through Direct Debit & ECS ( Post Dated Cheques shall not be accepted )

Reliance SIP Insure – How does this work? An investor does a monthly SIP of Rs. 5,000 for 15 years in Reliance Growth Fund If he dies after a period of 5 yrs, then his Sum Assured= Unpaid SIP installments = 10 yrs (ie 10*12 months) X 5, 000 = Rs 6, 00,000 This amount will be paid by life insurance company to SIP investor’s nominee account* with Reliance Mutual Fund and will be invested in Reliance Growth Fund (in the same scheme in which the deceased has earlier invested)

Load Structure : The Entry Load under Reliance SIP Insure shall be same as applicable to normal purchase /additional purchase transactions in the respective designated schemes However, there will an Exit Load of 2%, if the accumulated units acquired or allotted under Reliance SIP Insure are redeemed or switched out to another scheme before the maturity of SIP tenure as opted in the respective scheme either by the SIP-Insure unitholder or by the nominee*, as the case may be.

UTI - Unit Linked Insurance Plan goes SIP way.

UTI-ULIP is an open-end tax saving cum insurance scheme. The investment objective of the scheme is primarily to provide returns through growth in NAV or through income distribution and reinvestment thereof. It is a unique product, which provides multiple benefits to its investors viz. Life Insurance Cover without any medical examination, Accident Cover up to Rs 50,000, tax benefits under Sec 80C of Income Tax Act, 1961, easy liquidity and ability to time investments for payment of renewal contribution.

To provide additional benefits to investors, UTI Mutual Fund has further enhanced the features of UTI-ULIP namely:

• Target amount increased from Rs 5 lakh to Rs 15 lakh.
• Flexibility to invest higher than the maximum target amount.
• Higher Insurance cover upto Rs 15 lakh.
• Fixed Term Cover introduced under the scheme.
• Choice given to investors for Fixed or Declining Term Cover.

Membership to continue even in the event of non-receipt of installment. Premium will be paid to Life Insurance Corporation of India by redeeming existing units.
To provide greater flexibility and easy convenience to investors, UTI Mutual Fund has introduced Monthly Systematic Investment Plan (SIP) under UTI ULIP.

The features of ULIP-SIP are as under:
Minimum SIP Installment :Rs 500 and in multiples of Rs 100

Minimum Target amount under 10 year Plan
Rs 60,000 and in multiples of Rs 12000

Minimum Target amount under 15 year Plan
Rs 90,000 and in multiple of Rs 18000

Eligibility
a. Under 10 year Plan: Between the age group 12 years-48½ years
b. Under 15 year Plan:Between the age group 12 years-42½ years
Entry Load : 2.25% ; Exit Load : 2% for premature withdrawal

Tax savings schemes which have performed in bear as well as bull market

Following are the few of the good Top performing ELSS mutual Funds.

1) SBI Magnum Taxgain
2) Sundaram Tax saver
3) Principal Personal Taxsaver
4) ICICI Pru Tax plan

All of the above funds has given an annualized return of between 30% to 50% compounded annually as on 30th june 2008 for previous 5 years.

Note: To find out the actual returns as of today you can click on the following link. http://www.moneycontrol.com/india/mutualfunds/gainerloser/10/14/snapshot/op1/an/option/eqt/sort/yr5

Bajaj Allianz New Family Gain Equity Index Fund II (ULIP plan)

Recently my friend told me about an excellent plan he has taken from Bajaj Allianz. He says it gives insurance as well as investment benefits and he was very excited about it.
He showed me the policy booklet along with all the rules and regulations.

Following are the exact details of that plan.
Premium to be paid per annum : Rs 12000.00
Sum Assured : 4,08,000 (15 years) (His age is 31 yrs)
Allocation : 30% (97% from 2nd year onwards)
Net investments : Rs. 3600.00
Unit Price : 15.227 (as on 4/4/2008)
Number of Units : 236.4221

Mortality charges : -59.50 = -3.9075 units
Service tax charges : -10.37 = -0.6810 units
Rider Premium Charges: -24.48 = -1.6077 units
Policy Admin Charges : -50.00 = -3.2836 units
Total : 226.9423 ( 226.9423 * 15.227 = Rs. 3455.6504)
(Fund management charges is 1.25% per annum for equity fund)

Now you can decide for yourself how good is this policy when your first years premium of Rs. 12,000 is converted to an actual investments is just of Rs 3455.65
Rest of the money which is (12000 - 3455.65 = Rs8544.34) is expenses.

Even at the rate of 12% this will take approx more then 11 years to even reach original amount Rs. 12000.

TIPS: If you have already taken this policy then you can continue with it because the worst is over in the first premium itself. For people who are still looking at such policy you can go for a Term Cover for insurance and do an SIP into a good Large cap Mutual Fund. If you are less averse to risk then you can opt for a Balance fund.

Mutual Funds portfolio is showing a loss ! what should I do in this markets ?

Markets by there very nature will always either go UP or go DOWN. Its a know fact over the years market will surprise most of the times to most of the people. I knew of people who predicting the markets will touch an index 25000 in january 2008 when it was around 20000 now the same people a predicting doom, they are predicting market will go down to 5000 . This may be true or may be not, but the point is markets will always surprise and you need to have patient and understand that it will behave the way it is.

The following are few Rules to follow during tough times.

1) The smartest set of investors are those who even in this trying times dont stop there investment Plans. You should continue doing your SIP in good funds.

2) Analyze your Mutual Fund portfolio or get it analyzed by a Financial professional.
Get rid of the non-performing funds. (The funds which has given comparatively lesser returns then the benchmark or it's similar comparable peer group of considerable amount of time)

3) Get rid of aggressive funds and move more of your allocation to more stable large cap funds.

4) If you cannot accept too much risk then opt for a Balanced Funds.

5) STICK to you Financial plans; do not change your investing plans with short term fluctuations in markets.

This ups and downs are more of an opportunity for us to buy things at a cheaper price.
Try to look for oppurtunity in every adversity !

ULIP's better product or Mutual Funds

ULIP's or Unit Linked Insurance Product are as the name suggest provides insurance as well as Investment avenue both combined into one product. Most of us human being by nature want more. so we feel very happy when we take an ULIP because it has insurance also.
but BEWARE Most of the ULIPs currently in the market has heavy upfront charges of as high as 25% to 50% of your first year premium. This products are always good only for the agent who sells them because they get high commission.

If you need an insurance then always opt for a pure vanilla Term Insurance which is the cheapest of all kinds of insurance. If you want to save money and create wealth then you can do an SIP in mutual funds (Mutual funds have and entry load of only 2.25%) which is much much less then 25% to 50% charged by ULIPs.