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POSTED BY ON December 27, 2010 3:50 am COMMENTS (5)
Good day all,
I have been invested in Bajaj Allianz ULIP – Equity Gain Fund since the year 2005. Yearly premium is 50000 and cover provided is x5 times. I plan to continue investing in this ULIP for a long term. The present apportionment is 100% into the scheme. I pay a single premium every year.
My query is whether I should change over from paying a single premium to a monthly premium mode thereby bringing it on the lines of a SIP. I.e. if I should start paying something on the lines of Rs. 5000 p.m. as contribution towards the premium. Could someone clarify if the apportionment charges levied would be greater in case of a monthly payment mode than a one time annual payment mode & if yes would they be significant enough? My intention towards switching to a monthly payment is to harness greater benefit due to systematic investment.
I would be grateful if someone could clarify this matter for me.
Wishing all a Merry Christmas & a Happy New Year.
Regards,
Aditya Pednekar
2021 © Jagoinvestor.com All Right Reserved
@Aditya,
A very simple logic to your question. Do you think Daily SIPs are better than monthly SIPs? There is no sacredness associated with a SIP of “one month”. You can do it even quarterly, half-yearly or yearly. An SIP is just a time-diversification and over long periods of time, which you say you are ready, the interval should not be statistically significant.
Ramesh
I have no doubt about the success of SIP route. The thing bothering me in this ULIP plan is whether a monthly payment would face more allocation charges rather than an annual payment for the agreed premium.
@ Aditya
No, allocation charges won’t increase with monthly mode.
But in these old ULIPs usually the allocation charges are on higher side and so were the FMC as compared to the today’s ULIPs under new guidelines of IRDA.
You had taken just 5x cover, so by now the fund value must have become more than the cover. Now it is as good as a mutual fund with heavy upfront and FMC.
Any speacial reasons you want to stick with it?
Unless it is giving you good returns comparable with good MFs and you are going to use it for switching/asset allocation type strategies, you can rethink of continuing with it.
Another way you can make it work better for you is by increasing your insurance cover in the plan. They were offering a premium multiplier upto 100-120 times , I think. The information could be available in the policy document.
shashank
The only reason I am still suscribed to this fund is to negate the effects of all the charges paid upfront or otherwise over a long period ( >10 years). The fund hasnt performed badly I believe and I am looking at actively managing it i.e. asset allocation. Management charges are not as devastating as some other fund houses.
I will definately check up on the premium multiplier option.
Thanks for all your comments Ramesh & Shashank.
aditya
Dear Customer,
May we request you to send us your complete contact details, Policy No. and e-mail-id on help.support@bajajallianz.co.in OR customercare@bajajallianz.co.in.
Regards,
Bajaj Allianz