-
-
-
Services
-
-
-
More
-
POSTED BY ON September 21, 2012 12:23 pm COMMENTS (3)
I compared two traditional plans and below are the details
Traditional RD/FD Vs ICICI Pru Guaranteed Savings Insurance Plan
If i invest the same amount of money in RD/FD(Assuming every year I deposit 1 L for Seven years after the maturity) for 7 years and leave it for 15 years i will get 2.9 L extra than this.
· The only benefit i could see in your plan is this has insurance cover for which there is no amount being deducted like admin or mortality charges etc like ULIP, this insurance is free
· The biggest benefit which they claim is that the maturity amount after 15 years is “Tax Free” the reason they are saying is if the insurance cover is 10 times the premium amount then the maturity amount is tax free, he mentioned some section for the same which I don’t remember. Is this true ?
· If the Maturity amount is tax free then this plan has an edge of 2.3 L than the traditional plan
I know if we invest in Mutual Funds or ETF the returns might be higher however the reason for comparing this with RD/FD is the amount which is being invested is also being invested in Debt funds etc so comparison with RD/FD to me makes more sense.
Do let me know your comments
|
Calculation of the premium paid for ICICI Pru Guaranteed Savings Insurance Plan with 8% interest, below is the table |
||||||
|
S.No |
Premium |
Principal Every Year |
RD with 8% Int |
Int Amt |
Total with Int |
Regular Additions @ 3.5% |
|
1 |
100000 |
100000 |
8 |
8000 |
108000 |
24500 |
|
2 |
100000 |
208000 |
8 |
16640 |
224640 |
24500 |
|
3 |
100000 |
324640 |
8 |
25971.2 |
350611.2 |
24500 |
|
4 |
100000 |
450611.2 |
8 |
36048.896 |
486660.096 |
24500 |
|
5 |
100000 |
586660.096 |
8 |
46932.80768 |
633592.9037 |
24500 |
|
6 |
100000 |
733592.9037 |
8 |
58687.43229 |
792280.336 |
24500 |
|
7 |
100000 |
892280.336 |
8 |
71382.42688 |
963662.7629 |
24500 |
|
8 |
|
963662.7629 |
8 |
77093.02103 |
1040755.784 |
24500 |
|
9 |
|
1040755.784 |
8 |
83260.46271 |
1124016.247 |
24500 |
|
10 |
|
1124016.247 |
8 |
89921.29973 |
1213937.546 |
24500 |
|
11 |
|
1213937.546 |
8 |
97115.00371 |
1311052.55 |
24500 |
|
12 |
|
1311052.55 |
8 |
104884.204 |
1415936.754 |
24500 |
|
13 |
|
1415936.754 |
8 |
113274.9403 |
1529211.694 |
24500 |
|
14 |
|
1529211.694 |
8 |
122336.9355 |
1651548.63 |
24500 |
|
15 |
|
1651548.63 |
8 |
132123.8904 |
1783672.52 |
24500 |
|
|
|
|
|
|
|
|
|
Total |
700000 |
|
8% int after 15 years |
|
1783672.52 |
367500 |
|
|
|
|
|
|
|
|
|
|
Insurance Cover |
1000000 |
Total Regular Additions |
367500 |
||
|
|
Sum Assured |
700000 |
Maturity Additions |
420000 |
||
|
|
Annual Premium |
100000 |
Sum Assured |
700000 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Maturity Value after 15 years |
1487500 |
|
|
|
Same in FD with 8% interest after 15 years |
1783672.52 |
|
|
||
|
|
|
|
|
|
|
|
|
|
RD is better than this only diff is insurance which shld be taken care by the term policies (To separate Insurance from Investments) |
296172.5203 |
||||
|
Description |
Recurring Deposit |
GSIP |
|
Annual Savings |
100000 |
100000 |
|
Payment Term in Yrs |
7 |
7 |
|
Maturity Term in Yrs |
15 |
15 |
|
Rate of Return |
8% |
8% EBI |
|
Maturity Value |
1783673 |
1487500 |
|
Less:- Income Tax @ 30% |
535102 |
Tax Free |
|
Post Tax Maturity Value |
1248571 |
1487500 |
|
GSIP Advantage |
|
238929 |
2021 © Jagoinvestor.com All Right Reserved
Dear Chandrasekhar, please check the below link –
http://www.iciciprulife.com/public/Life-plans/GSIP.htm
It’s clearly written there that returns in this plan are not gtd. Whereas in case of RD, your returns are gtd. Should I say more?
Now a shock for you, for that 7Y prem. Paying & receiving maturity after 8 more years, the maturity amount is not at all tax free. Yes you read it right, not tax free. The reason is Sum assured is = Prem. paid * prem. pmt. term. So for 7Y term, the sum assured can not be 10X of prem. amount & hence can not be tax free.
Thanks
Ashal
Thanks Ashal, this clarifies
1. What if the govt changes the IT rules to include only those Ulips with insurance amount = 20x and not 10x?
2. What about comparison with PPF? Tax free status.
3. What about liquidity in this plan, as compared to RD/FD?
Anyways, the insurance component is pathetic to say the least.
Think.