4G ULIPs are a long term investment product as returns are superior when you invest at an early age. Investing in the online ULIPs at an early age also bring in various other benefits like comparatively low premium, coverage irrespective of your future liabilities and a lot more. Investing early gives you an option to look at the wider perspective of your investment and also help you reap the numerous advantages of long term investments.
Here is a transcription of the video in which, Anuj Mathur, MD and CEO, Canara HSBC Oriental Bank of Commerce Life Insurance, is talking about the benefits of early investment in online ULIPs.
Vivek Law – There was a time when it was felt that if you stay for 12 or 14 years with ULIPs then the charges come to a point where it started favoring a ULIP. The new 4G ULIPs from day one are competitive with the mutual funds, so would you still say that an investor should look at least ten to fifteen years of tenure.
Anuj Mathur – Yes, I would suggest so because insurance is a long term product and you get lots of benefits by entering at an early age. Let’s say if I am thirty years old and if I am entering early actually I am locking in the charges, so that’s the benefit.
If at the age of fifty-five, we go and buy insurance we will not get insurance or if we’ll get insurance we will get it at a very high premium, so if we are investing long term we are actually locking in a kind of benefits for that period irrespective of your health later.
Whatever policy you have bought and if you bought for the long term then you stay invested for that tenure and you get the benefits, so obviously the returns are superior in the long term. I would suggest that any time frame beyond ten years is good so the tenure depends on customers’ needs and goals.
Ultimately, if the customer is planning for marriage or education of children then it has to be a slightly longer term. We recommend customers to have a slightly long term outlook. We have even seen that over five years what customer tends to get is actually a superior return and as we discussed in this particular product practically there no other charges, thus what you are paying is basically refund management charge which is very competitive at 1.35%.
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