ING Vysya Best Years policy?

As per the policy document, following are the charges

Applicable Charges

Initial one-time charge Rs. 700

Contribution Related Charges

All first year contributions 10%

All subsequent contributions 3%

Annual Management fee will be levied on each 31st March on the IPA after crediting bonus interest. The Annual Management fee will depend on the size of balance in the IPA and will be as follows:

Balance in IPA Annual Management Fee p.a.

Upto Rs. 50,000 2.5%

50,001-75,000 2%

75,001-1,00,000 1.75%

Above 1,00,000 1.5%

As I can understand, the agent only told you that there is guarnteed return of 8%, but what he did not tell you was that it is on your corpus after deducting charges. Your return is eaten by the charges of the plan & I feel sorry that these charges were not explained to you clearly. Insurance companies & their agents in india are doing this mis-selling in almost 90% of the policies sold.

Now I think you should continue for more 2 years in this policy to recover your losses of first year(when you paid 10% + 700/-). For next 2 years , following will be the charges.

1. 3% deduction on annual premium.

2. About 2.5% of your total accumulation every year.

As per my estimate your final return will give you a yield of 4% on a declaration of 8% return.

Ing Vysya Policy

You can call up the customer careof ING Vysya and check with them what are the surrender charges. If there are no surrender charges then you can surrender the policy. If there are then there is absolutely no advantage in surrendering the policy.

Secondly all ULIP's have the most charges in the 1st year due to which your actual investment would have reduced. These start giving returns only after 5 years, as the charges from 2nd year onwards is very small. You can also check with the customer care what are the annual charges in your case.

Thirdly you can check the NAV as see the grwoth rate per annum, if its good then you can calculate after deducting the charges and see what your money would be after 4 yrs, 5 yrs and decide what is good for you.

Also, please check with the customer care whether the total fund value that you will be getting, is it taxble or not.

In all the ULIPs, even with or without Life risk cover, initial charges could be higher side. I think in your plan they had deducted around 15% (10% +2.5% and Rs.700) from your premium and the balance say around 85%of 40,000 which is around 36,000/-. If the Growth in the fund is less then you cannot expect more. Please check the NAV for the past 3 years and find the growth rate. IF the growth rate is between 10 to 30% per annum then patiently wait to get your money to grow further or if find the growth is even less than 10% per annum for the last 3 years, then close the account and invest in 5 star rated mutual funds. To know more about Mutual funds visit valueresearchonline.com or moneycontrol.com

good luck

pnkmurthy@yahoo.com

http://www.geocities.com/pnkmurthy/lic.html