[graaja]

Originally Posted by vharihar

Just got a call from HDFC Life. He was explaining about one Sanchar Plus plan of theirs. Starting at the age of 51, invest 1L per year for 10 years, and you'll get 91K per year tax free from 11th year onwards till the age of 99.

How does this sound?

That is about 6.2% returns per year, which would result in a zero balance at the 49th year. But one thing very important most people miss in these calculations is the effect of inflation on the withdrawal.

For example, even if we consider an inflation of 4%, you will need 1.4L for the same purchasing power of 91K in the 11th year. You will need a whopping 6.2L in the 49th year for the purchasing power of 91K today.

[vharihar]

This article seemed useful and well written (A beginner’s guide to investing in NPS):

https://www.thehindubusinessline.com...le32649876.ece

[Holyghost]

Originally Posted by graaja

Please stay away from this scheme. I did some reverse calculations in an Excel file. If after paying out 4,73,800 for 25 years, the corpus becomes zero, then the returns is just 4.8%

Attachment 2039228

That is an extremely helpful excel sheet. Would it be possible to share the xls formula or the xls itself? It would be really helpful to calculate actual returns whenever the bank officials starts their marketing.

[graaja]

Originally Posted by Holyghost

That is an extremely helpful excel sheet. Would it be possible to share the xls formula or the xls itself? It would be really helpful to calculate actual returns whenever the bank officials starts their marketing.

I created that excel to workout details and did not save it after I posted. I put together another excel file from another calculator I did for generic ULIP calculation. Attaching it here for reference.

ULIP Returns Calculator.xlsx

[jkrishnakj]

Does anyone have a view on ICICI Pru GIFT plan. It’s called as Guaranteed Income For Tomorrow.

Broadly, it works like this.

For example, you pay premium of 10 L per annum for 10 years, with a life cover for 10 times the annual premium paid, from the second year onwards, you get 2.5L per year back guaranteed for 10 years. From the 11th till the 20th year, guaranteed return of 13.5 L every year.

My advisor is nudging me to go for this. It sounds like a good plan to me. Thoughts/critics are welcome.

[graaja]

Originally Posted by jkrishnakj

Does anyone have a view on ICICI Pru GIFT plan. It’s called as Guaranteed Income For Tomorrow.

Broadly, it works like this.

For example, you pay premium of 10 L per annum for 10 years, with a life cover for 10 times the annual premium paid, from the second year onwards, you get 2.5L per year back guaranteed for 10 years. From the 11th till the 20th year, guaranteed return of 13.5 L every year.

My advisor is nudging me to go for this. It sounds like a good plan to me. Thoughts/critics are welcome.

I did a rough returns calculator for the above. I assumed the insurance cover is for the full 20 years, and an insurance premium of 25K per year for 1Cr. The ROI is about 6.15% (experts please correct me if I have made a mistake in the calculations), not a great return IMHO, considering inflation.

If you could manage your own investments by creating a portfolio of debt and equity instruments (equity and debt mutual funds, stocks, PF etc.), get a 1Cr term insurance, and if you manage even 8% returns, you would be left with a corpus of about 41L if you withdraw the same amount as the ICICI plan offers.



Put the other way, this is what ICICI would make from your investment if they managed to generate 8% returns (which I am sure they will)

This is why I have realized, it is totally worth learning the fundamentals of managing your own investments instead of giving this to these financial institutions who will just make big profits from your investments.

PS: Your financial advisor will get a hefty commission from your premium. That is why these advisors keep pushing such policies.

[jkrishnakj]

Thank you GRaaja.

I don’t need to be paying the 25K premium. It’s just 10L per annum (or any value that is comfortable) for 10 years.

Fully agree that the advisor takes a big chunk, no doubt about it.

My real issue is in being able to be ‘smart’ with the money. I’m more of the RD, FD and real estate kind of person. With about a decade and few months left in the career, I am thinking what makes sense to get some monthly recurring income that can help from 60-70 years. This plan did look like it’ll take care of that aspect.

[graaja]

Originally Posted by jkrishnakj

Thank you GRaaja.

I don’t need to be paying the 25K premium. It’s just 10L per annum (or any value that is comfortable) for 10 years.

Fully agree that the advisor takes a big chunk, no doubt about it.

My real issue is in being able to be ‘smart’ with the money. I’m more of the RD, FD and real estate kind of person. With about a decade and few months left in the career, I am thinking what makes sense to get some monthly recurring income that can help from 60-70 years. This plan did look like it’ll take care of that aspect.

The 25K annual premium is just a virtual payment. The company would need to take the premium for the insurance from your investment. That is why I added that column.

If you do not want to worry about the hassles of managing your investments and if the 13.5L per year returns looks good, then yes, you can definitely go with this.

I am also guessing that all the returns you get from the policy are tax free. Just make sure of the tax component.

[Gansan]

Originally Posted by jkrishnakj

I am thinking what makes sense to get some monthly recurring income that can help from 60-70 years.

A simple way is to buy one KVP for a face value of your choice every month, timed to mature from your month of retirement+1 onwards. For the next ten years, simply encash one certificate every month for double the value.

I am saying this from hindsight. It didn't occur to me during the decade preceding my own retirement.

[SmartCat]

All these money-back insurance scams offer around 6% pa at best. You are better off with a term insurance + debt fund or term insurance + FD.

[jkrishnakj]

Thank you Graaja, Gansan and SmartCat.

Graaja: Yes, the payouts are tax free
Gansan : KVP is part of my schemes. Need to execute.
SmartCat: Thanks as always.

I think I woke up a bit late in all this planning, but glad that I’m at least acting on these now.

[FrozeninTime]

Originally Posted by SmartCat

All these money-back insurance scams offer around 6% pa at best. You are better off with a term insurance + debt fund or term insurance + FD.

I have been taking a conservative approach to investment by only investing in either PPF or FD.
Please suggest a good investment strategy with moderate risk.

[Voodooblaster]

Originally Posted by FrozeninTime

I have been taking a conservative approach to investment by only investing in either PPF or FD.
Please suggest a good investment strategy with moderate risk.

Investment strategy depends on your current age and expected age of retirement.

Also calculate approx current annual expenses( to find approx inflation adjusted amt that will be needed afte retirement). While some expenses are lesser for a retired person (vis a vis transportation, childcare, clothing etc), some increase (Healthcare, Medical Insurance etc)

Visit a financial advisor (who is not selling you anything) and get a personalized investment plan

[balenoed_]

Just wondering if anyone has signed up for LIC's Jeevan Umang poilcy. A pension + risk coverage policy.

A relative (an agent) is persuading me to take a policy and have provided illustrations on the benefits. At first glance, it all looks good but not yet sure what the hidden conditions would be.

[Voodooblaster]

Originally Posted by balenoed_

Just wondering if anyone has signed up for LIC's Jeevan Umang poilcy. A pension + risk coverage policy.

https://licindia.in/Products/Insuran...s-Jeevan-Umang

Please go through attachments in the above link.

The policy brochure doesn't seem to mention a defined monthly pension. It offers 2% of basic sum assured yearly after you finish the premium payment.

Illustration of the maturity benefit that may be considered as annual pension:

Basic SA: Rs 2lacs
40 years old
Premium payment Tenure: 15 years
Annual Premium amount: 15,739 plus GST
15 years premium: 2,36,085 plus GST

After you cross 55 years, you get Rs 16,000 yearly

You get the premium you paid(without GST) only after a period of 15 years {ie when you turn 70}

Factor in inflation also to calculate your return of investment.

If a reliable pension is your need, please check annuity schemes also.

As always work out the math independently before committing

You also receive a lumpsum payout after maturity (when u reach 100 years)