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Transféré par Roshan Malhotra

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my

personal

opinion

its

waste.

May

be

simple

FD

will

give

you

better.

1. This is no insurance. In case of claim, only the amount you paid and 5% compounded interest. If you make FD you will get better even after paying taxes its 6.219% compounded on amount paid. Get a Guaranteed Death Benefit (GDB) (Conditions Apply ) which is sum of all premiums paid till date compounded at the rate of 5 percent per annum 2. They say FD rate can go down. So is their regular addition (which they dont tell, and project is as high and constant). I will assume mostly they will go up and down with same rate. Regular Additions (RA) This guaranteed addition, expressed as a percentage of the SA, will be declared at the beginning of every policy year Regular year. It calculated 50% of rounded preceding the first GRY of Addition (RA): The RA will accrue at the end of each policy will be disclosed at the start of that policy year. The RA shall be as percentage of the SA. This percentage is guaranteed to be the annualised gross redemption yield (GRY) of the 10-year G-Sec, down to the lower 0.2%,as at the Review Date immediately the start of the policy year. The Review Date shall be the 7th of month of every quarter. In case the 7th is not a working day, the the next working day shall be considered for this purpose.

According to their projection if I pay 1L premium per year (i.e. 7L in total) I will just above 14L after 15Yrs (suggested by their agent to whom I met recently). Here they assumed constant 4.5% addition (i.e. 9% return on G-Sec which is on higher side for G-sec) (In Dec11 actual rate of RA was 4.3%). I am sure if FD rates are going down then surely will be returns of 10 Yr G-sec so will be RA of GSIP. So to make it apple to apple I will assume constant FD rate of 9% (30.9% tax each year so effective 6.219% after tax adjustments). Lets say we put 1L for 7 Yr and take out all money at end of 1L invested for 15Yr @6.219%compounded ~= 1L invested for 14Yr @6.219%compounded ~= 1L invested for 13Yr @6.219%compounded ~= 1L invested for 12Yr @6.219%compounded ~= 1L invested for 11Yr @6.219%compounded ~= 1L invested for 10Yr @6.219%compounded ~= 1L invested for 9Yr @6.219%compounded ~= Total after 15Yrs 14.54L with all taxes paid for rate of 15Yrs. 2.47L 2.33L 2.19L 2.06L 1.94L 1.83L 1.72L FD.

Other benefits of FD over GSIP: 1. No hard commitment. If you have more than 1L put it more. If you dont have no loss like in GSIP where not paying premium will attract penalty/deductions. 2. If you want money before 15 Yrs (I am adding this point as its not insurance, you are only covered with amount that you paid), in GSIP there will be deductions from what you paid but in FD you will get it all. 3. After DTC tax dont know how much will be tax benefit for payout as sum assured is only (max) 7x of annual premium. 4. Only guarantee made is RA is 50% of 10Yr GSec. No guarantee on how much maturity addition, just addition a high amount to artificially show returns higher.

I am not saying FD is very good investment instrument, but from calculations and other terms it seems GSIP is surely not better than FD by any angle. Disclaimer: This is my personal opinion and calculation sharing with you. Use your own judgment. If I missed any point and mistake in calculation here please let me know, I will also love to invest in better plans ;-). I used the terms & conditions defined in their policy brochure at http://www.iciciprulife.com/public/Brochures/GSIP_brochure_FINAL.pdf By Mr Investor on Feb 13, 2012 I feel I have wrongly selected this ICICI gurantee saving insurance plan policy. I am still continuing it. If i discontinue in the middle I have lose huge money. I am paying monthly Rs10,000. People will always think positive and expect the high returns at the end of 15th or 20th years.. good if you are getting it.. There are other sides of this policy tooo.. If the policy holders passed away in the middle (ie before 15/20 years) Did you know how much the nominee will receive? he/she will receive only the Sum assured with 5% interest. no extra benefits/bonus. To get the entire benefit this policy, policy holder should survive for 15years in the case of 7 years premium paying term or 20 years if the premium paying term is 10 years. great risky policy ... By rviswar on Feb 10, 2012

This is another post from the Suggest a Topic page, and today Im going to look at some features of the ICICI Prudential Guaranteed Savings Insurance Plan. The ICICI Pru Guaranteed Savings Insurance plan is an endowment life insurance plan, and it gives you life insurance cover plus a certain amount at the maturity of the plan. This plan falls under Section 80C tax saving schemes which means the premium payable will be applicable for deduction from your taxable salary under section 80C. I find that the easiest way to explain how this plan works is to take an example of one option with certain figures and go through it. Lets use the same example that they use in their benefit illustration page. Lets say you choose the 15 year term policy and decide on a premium of Rs. 25,000. First thing to keep in mind is that in this option you have to pay premiums for the first 7 years, but you get the money at the time of maturity which is at the end of the 15th year. The good part about this is that your insurance cover lasts for 15 years as well. So, how much is the insurance cover? Insurance Cover = Annual Premium x Number of Premiums In this case 25,000 X 7 = Rs. 175,000. From the sample term insurance post you know that this is not much and you can get a cover of as much as Rs. 50 lakhs with an annual premium of Rs. 5,000 or so. However, this is one benefit you do get so keep that in mind. Now, the next and slightly trickier part how much money do you get back? You will get your money back at the time of maturity so in this case at the end of 15 years, and they have split how much you get in three buckets.

1. Premium Payment: This is simply the sum of premiums that you have paid, so

your own cash, and this forms part of the guaranteed payment they talk about.

2. Regular Additions: Every year, they will declare a certain percentage of the sum

assured that will be added to how much you receive back from them. From the past numbers I see that this is around the 4% mark, so in our case 4% of Rs. 1,75,000 or Rs. 7000 will be added to what you get at the maturity. This will be added throughout the

term of the policy, so in our case 7,000 x 15 = Rs. 1,05,000. This is also part of what they consider the guaranteed payment. So, the guaranteed total is Rs. 1,75,000 + Rs. 105,000 viz. Rs. 2,80,000.

3. Maturity Benefit: On top of the two amounts above they will also give you a

maturity benefit, but this doesnt fall under the guaranteed category. I think this means that they are not obliged to pay this amount, however in their illustration they have shown this to be Rs. 74,292. If you sum up these three amounts you will get a value of Rs. 3,54,292. So, under the ICICI Guaranteed Savings Insurance plan, if you were to pay Rs. 25,000 for 7 years, you may get Rs. 3,54,292 according to the illustration that they have shown. Note that the only number that you can be certain of in this calculation is the premium because thats an absolute, and they will return that. For the Regular Additions amount they will pay you a percentage thats at least half of the 10 year G-Sec and so far thats hovered around the 4% mark, and from their documentation I couldnt find anything about the maturity benefit, but at least for this illustration they have used the same rate as the regular addition so lets just assume that you will get that. Now, that I have this number I want to know at what rate should I invest my money myself to reach this target. Lets choose a conservative number and say that I can only grow my money at 6% per year. Now, I use the compound interest calculator at MoneyChimp and find out that if I were to invest Rs. 25,000 every year and grow it at 6% at the end of 7 years I will have about Rs. 2,20,000. I also used the RD calculator to see how much I will get if I were to get a recurring deposit for 7 years with Rs. 2083 (25,000 / 12) every month for 84 months (years) and that gives me about Rs. 2,16,000. So, lets say using these conservative numbers you invest your money for 7 years. Then take Rs. 2,20,000 and do a fixed deposit at 6% for the remaining 8 years. The same calculator shows that I will get about Rs. 3,50,000 at the end of the term. This shows me that even this conservative interest rate of 6% earns you enough to match the returns indicated by the ICICI Prudential Guaranteed Savings Plan, and in my opinion a cover of Rs. 1,75,000 is not a big enough amount to sway your decision.

Having come this far the last thing to see is what happens if you want to cancel the policy mid way because that seems to happen a lot. The brochure says that if you pay the premium for at least 3 years then the policy acquires surrender value, which I take to mean that if you cancel before that time period you dont get anything at all. Then to calculate the surrender value you have to see the higher of the two:

Guaranteed Surrender Value: This is 35% of the base premiums paid minus the

first year premium. So if we go back to our example and say that we want to cancel after the 4 installment. Then 35% of 1,00,000 is Rs. 35,000 and if you reduce the first premium from that then you are left with Rs. 10,000 only.

Non Guaranteed Surrender Value: This is the present value of the paid up sum

assured discounted at the gross redemption yield at the review date immediately preceding the date of surrender, plus 2% annum. Quite frankly, I dont know how to calculate this or even what this means, I can only hope its close to the money you have already paid but thats probably not how it is. Ive covered all the features that caught my eye, and tried to be as comprehensive as my understanding permitted. If youve come this far going through the whole article the decision makes itself. If you see any inaccuracies or mistakes in understanding then please let me know, and of course as usual everything that you have to say is welcome.

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