Push products like ULIPs when sold online to net-savvy investors, without agents, aim to reduce costs. But while costs are lower, the fund performance can only be evaluated over time
If you are looking for a regular or single premium ULIP with low charges, you could consider a new online product that has been launched recently. Aegon Religare's iMaximize offers the single premium option. However, the regular premium option does not have premium payment term (PPT) flexibility and the policy terms are 15/20/25 years. So, if one is looking for the flexibility to continue the cover without paying the premium after a specific number of premium payments, this may not be the right product.
Another new product is Bajaj Allianz's iGain III. With this, a customer can choose a PPT of five years or up to the full term of the policy. The insurer will accept premium payments only till the PPT that is decided by the policyholder and continue the cover till the end of the policy term, as long as the premiums till PPT are paid.
Both the products are designed to be sold online and without agents so as to reduce costs for net-savvy investors.
Online ULIPs -
iMaximize allows only four switches on investment options in a policy year. Beyond this, there is a minimum charge of 0.1% on the amount switched or a flat Rs500 for every extra switch, subject to minimum amount of Rs100 switched. iGain III allows unlimited switches with no extra cost.
iMaximize offers the trigger portfolio strategy and the self-managed portfolio strategy. The equity component in one of the self-managed portfolio strategies (accelerator fund) is 80% to 100%. The trigger portfolio strategy moves from equity to debt periodically and will limit the returns.
iGain III offers investors a selectable portfolio strategy and the wheel-of-life portfolio strategy. The maximum equity component ranges from 60% to 100%. The wheel-of-life portfolio strategy will reallocate your fund value among various funds in the proportion based on your outstanding years to maturity. It is fine for conservative investors, but the move from equity to debt will limit returns. Moreover, such a move at the wrong time in the equity cycle will not benefit from an equity upside.
iMaximize does not offer any rider, while iGain III offers six different riders at an additional cost.
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