UL - Young Star Champion (HDFC)

[amohan]

I have a policy i.e. UL - Young Star Champion (HDFC) since Jan-09 and monthly premium is Rs. 5000/- , now I do not want to continue this, I know that no money will be refunded to me. I think, I should have selected other plans because I am not satisfied with this regarding the returns therefore, I am not interested to further block my money in this. I want to invest my money in short term plan (3 Yrs.) such as Mutual Funds etc. Am I doing correct, should I continue this policy for at least 3 years or discontinue this. I just want good returns in a short term. Kindly guide me.

Regards,
Anil Mohan

[PolicyWala]

Hi Anil,

In most of the policies the surrender value you got is very less. As the name of your policy suggests its a money back plan. As in your case you have paid only one premium and you are thinking that return of the policy is not as per your expectation, please don't continue. Instead of this you can go for MF - tax saving plan, but also cover your life with term plan of any insurance company.

Hope this help.

[amohan]

Sir,

Thanks for the reply.

With referenence to my earlier mail, I would like to inform you that I am paying my monthly premium i.e. Rs. 5,000/- since January-2009 and till date I have invested 30,000/- in this plan.

You are requested to guide me that what should I do now ? Actually the concerned agent did not tell me about the facts of this Insurance Plan (UL Young Star Champion- HDFC Standard Life).

As I have blocked my money and not even a single money will be refunded to me, in that case should I go with this for 3 years or discontinue this and select Mutual Fund.

I forget my money, but I need the best advice.

With Regarrds
Anil Mohan

[PolicyWala]

Hi Anil,

I have idea about Money Back plans of LIC but no idea about HDFC plans which you have taken. The three year funda which most of the agent give is also not good.
I have One example for you - ICICI Life Time Gold - which deducts high allocation charge of 20% of premium amount in first year, 7.5% in second year and 4% for the rest of the term.

For annual premium of Rs. 10,000 following amount gets invested.
1st year: Rs. 8,000.
2nd Year: Rs. 9750.
3rd Year+: Rs. 9600.

Overall in the first 2 years out of Rs. 20,000 only Rs. 17750 get invested.
(This excludes various other ULIP charge like insurance charge, fund management. charge etc).
However from 3rd years onwards charges gradually come down to 4%.
In order to enjoy actual benefit (or to compensate the loss of your capital in initial years) of ULIP one need to continue with the premium payment at lest 7 to 10 years.

Similar to each policy you have to check with the insurance company how much they are charging and what you will get after paying premium for three years.

One more thing to point out. If you pay Annual Premium you will save total premium cost ex- in monthly premium you pay 60000 (12*5) the same premium in annual mode would be 58000.

So please take some time out and go to insurance company and meet the Sales manager and discuss and understand the product.