Tata Capital and ULIP

amit80 1
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hi ,

Need an advice , i have Tata Capital NCD and recently received an intimation from the company that the rate of interest is reduced to 9.5% per annum . I had opted for option 2 and have time till sep to revert to the company . Should i redeem the NCD or continue the same as par revised rate of interest .

Also i have been investing annualy 72 k in two ULIP Scheme (Kotak Flexi plan and HDFC Young star 2) for last 6 yrs now . And the fund values as on date for both scheme is almost equal to amount that i have invested till date . I want to know whether should i continue these ULIP ?

Amit

investment-advice
1 Answers

Interest rates would fall this year everywhere so consider the market rates before taking money out from Tata capital NCD.

If you can get 9.5% in market with safe investments like fixed deposit etc. then you should take money out from NCD and invest somewhere else, as you have already gained from high interest rates on NCD.

You have chosen bad product for investment in ULIPs. Mix of investment and insurance usually is not good for either cause. The management and fund allocation charges in ULIP in initial years would have been 15-30% so amount invested would have been lower. Also since last 3-4 years, markets are also not doing well so fund value of your ULIPs have not improved.

You should take out amount from ULIP and invest into equity mutual funds for better return in long term.

For life insurance, better get a pure term insurance.

Pankaj Batra5212

Thanks for the advice .

Can you please clarify , when i chose to stop the SIP of my ULIP should i take out the money or let it remain with the fund guys .

Also , i have been investing in the ULIP for 71 months now . In the event i stop or take out the money is there any tax implication for me as i have been availing the exemption of the premium every year .

Please advice the term insurance plan that i can go for . Is it better to go for a multiple insurance plans covering me for an amount of 2 cr or a single plan will suffice .

Also , whats the reason for such a huge variation in the premuim bing quoted by firms . LIC being most expensive . My previous term insurance is with LIC.

Looking forward to hearing from you .

amit80•

As you have remain invested in ULIP for more than 5 years, exit won't be taxable now.

It would be better to take out amount and invest into equity mutual fund SIP for better growth over a long term (8-10 years).

It may be better to get 1 crore insurance each from two insurers. But make sure all information is disclosed correctly (about health, other policies purchased and applied for).

You can buy online term insurance from ICICI, HDFC, or Kotak. LIC does not offer online term insurance as of now and it may launch same soon with a much lower premium.

Read more about why premiums are low for online term insurance: http://www.jagoinvestor.com/2011/12/cheap-online-term-insurance-plans.html

Pankaj Batra•
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