Last February, it was LIC Wealth Plus which offered a highest NAV plan. Highest NAV plans give average returns, but LIC uses the same old concept with its new Samridhi Plus to attract the conservative investor
LIC has launched Samridhi Plus - a highest net asset value (NAV) ULIP. January, February and March are critical months for life insurance companies, when they come out with many more new products to lure customers. Highest NAV will be recorded on a daily basis in the first 100 months of the policy, which has a term of 10 years. The guarantee will be applicable only for units available in the policyholder's fund at the end of the policy term. In February last year, LIC launched Wealth Plus, a highest NAV ULIP that made great new business premium collection.
The highest NAV plan is not for those interested in an exposure to equities. At a recent seminar, Dr P Nandagopal, managing director and chief executive officer, IndiaFirst Life Insurance, dubbed the highest NAV ULIPs as having 'suboptimal performance'. Moneylife explained the highest NAV concept in a cover story, "What is the right life insurance" (22 April 2010) and why these policies are not the best options. (What is the Right Life Insurance?)
The most important point to understand is that insurance companies are guaranteeing NAVs and not returns! Are the two different? Yes. The NAV is a number at a point in time, whereas returns happen over a period of time. For instance, your 10-year plan may have hit an NAV of Rs14 after five years. At that point, it is the highest NAV. This Rs14 is guaranteed for the next five years. What if the NAV remains at Rs14 for the next four years, or goes down to Rs13? You would still get this NAV of Rs14. But Rs14 happens to be just 4% over 10 years! Not worth the investment. In the case of LIC Wealth Plus, the highest NAV recorded was Rs11.05 in over a year. But the actual returns would be less after adjustment of units for different charges.
The minimum premium for LIC Samridhi Plus ranges from Rs1,500 (monthly-ECS) to Rs30,000 for single premium. Consistent with other highest NAV plans, the insurer reserves the right to have investments in different instruments (debt, equity) in proportion of 0% to 100%.
The premium allocation charge (PAC) for a single premium policy is 3.3%. The regular premium policy has a first year PAC of 6% and from the second through the fifth year the PAC is 4.5%. The policy administration charge will be Rs30 per month in the first year and Rs30 per month escalating at 3% per annum thereafter, throughout the rest of the term of the policy.
There is a fund management charge of 0.90% per annum of the fund value and a guarantee charge of 0.40% per annum of the fund value. The mortality charges vary with the age and given in the LIC tables. The overall charges are in line with the average charges for other new ULIPs.
In the case of death of the policyholder during the term of the policy, when the cover is in full force, the nominee shall get higher of the sum assured under the basic plan and the policyholder's fund value.
The sum assured under the five years premium-paying term policies for age (at entry) below 45 years ranges from 10 times the annualised premium to 20 times the annualised premium. In case of single-premium policies, for age (at entry) below 45 years, the minimum sum assured is 1.25 times the single premium, while it is 1.10 times the single premium. The maximum sum assured under single-premium policies is five times the single premium if the age at entry is up to 55 years and 1.25 times the single premium, for age (at entry) from 56 to 65 years.
Based on the Tata Nano, the Tata Pixel–at just over three metres in length–is the most package efficient four-seater in the world
Tata Motors said it has presented Tata Pixel, a new city car concept for Europe, at the 81st Geneva Motor Show. Based on the Tata Nano, the Tata Pixel-at just over three metres in length-is the most package efficient four-seater in the world, comfortably accommodating four adults, unlike a typical city car which is either a two-seater or can accommodate two adults and two children only.
The Tata Pixel's ability to manoeuvre and park in the tightest of spaces is made possible by its Zero Turn toroidal traction-drive infinitely variable transmission (IVT), which assists rotation of the outer rear wheel forwards and the inner rear wheel backwards, while the front wheels turn at acute angles. The result is a turning circle radius of just 2.6 metres. The 'scissor' doors rotate upwards from the front to allow passengers to effortlessly enter or exit the Tata Pixel, even in the tightest of spaces.
A forward sweeping roofline, with minimal front and rear overhangs, accentuates the youthful styling. The Tata Pixel is also designed to provide a high level of connectivity. Key functions are controlled by the driver's smart phone, running 'My Tata Connect'--the first integrated human-machine interface (HMI) concept from Tata Motors.
A 1.2 litre three-cylinder turbocharged diesel engine, positioned at the rear of the Tata Pixel, gives lively performance. The engine is a low-friction design, featuring variable coolant and oil pump and rapid warm-up technologies. With optimised aerodynamic drag, low rolling-resistance tyres, stop-start technology, and intelligent battery charging, the Tata Pixel returns European combined cycle (NEDC) fuel economy of 3.4 l/100km and CO2 emissions of just 89g/km.
Tata Mutual Fund new issue closes on 9th March
Tata Mutual Fund has launched Tata Fixed Maturity Plan Series 31-Scheme B, a close-ended income scheme.
The investment objective of the scheme is to generate income and/or capital appreciation by investing in wide range of debt and money market instruments having maturity in line with the maturity of the scheme. The tenor is 368 days.
The new issue closes on 9th March. The minimum investment amount is Rs10,000.
CRISIL Short Term Bond Fund Index is the benchmark index for the scheme. Murthy Nagarajan is the fund manager.