Hi over the period Ulips suffered big blow from many because of its misunderstanding as an investment vehicle.Most of them recommends a combination of Diversified equity mutual funds and Term Plan ahead of an Unit Linked Insurance Plan(ULIP). I still feel one time investment in a ULIP could score over a Term Plan+Mutual Fund Combination.Pls See my Illustration.
1. Mutual Fund+Term Plan
Mr X Takes 25 lakhs term cover costs 66000 single premium and invests 34000 at once in a equity diversified fund and staying invested for 20 years. Now the net investment is one lakh and shall assume the mf gives 10% return on 34000(8% less fund management charges of 2%)will give 158440 after 20 years.
2. Single Premium ULIP
Mr Y takes 25 lakhs cover by investing Rs. 1 lakh in a single premium ULIP and staying invested for the same period. For the same return of 10%(inclusive of allocation and fund managenent and mortality charges) will give him Rs. 226097 which is a better return.
Kindly analyse my view and tell your suggestions