I made mistake in investing money. Advice needed.

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I also have another question to ask the experts here. I have a HDFC Personal Pension Plan from around 4 years. I have paid premiums regularly for 4 years and got just 9 or 10k as bonus till now.
I compared my MF investments and saw that mf give around 3 times money back in same period. Obviously cannot compare the two, but i want to opt out of this plan now and put that yearly premium into a MF where I will get higher benefits in long term. fyi, i pay a premium of 10k annually, and so have paid 40k till now. bonus is pathetic 9k. sum assured is some 2lacs + bonus after term of 20 yrs expires. so it makes no sense to continue with this plan anymore is what i feel.

i know some people will tell keep it, but in 20 years if i retire - what will be the value of 2 lacs + odd at that time? now even a lcd tv costs half a lac and maybe due to inflation it will cost 2 lacs 20 years from now. so my life is worth a tv set only? how long will that money go if i dont have a job?

In my eyes, this investment has not grown according to the inflation and according to market. 20 years down the line i dont see it going anywhere too. so i want to surrender it.

What i saw in offer document regarding surrendering the policy is:
surrenderterms.gif

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so what does it mean really? what will i get after paying 40k? a lesser amount or just 40k?

link of site: Retirement Plans | Pension Plans | Retirement Investment | Life Insurance Plans
 
^^ If I understand correctly, it would be

50% of premiums paid after the first year = 50% of 30K = 15K is the guaranteed minimum surrender value.

But the exact amount repaid to you is at the discretion of the Insurance Co. They vaguely say that it would be > 15K at least.
 
^ so if i surrender it now, i would take a loss of 25k upfront? while the market has increased in these years i have to bear a loss? shit.

these companies sure know how to rob a person through their stupid terms. fcuk, i'm never ever going to invest in insurance anymore. will surrender all my policies, and take the hit. i'll cover up for the losses after 5-6 years down the line, most probably (if the market goes higher).
 
i am in a similar situation as of u right now , i signed up for icici life stage pension for a term of 26 years with 30k annual premium which i have been paying since 3 years now , my dad got it for me in the year 2008 ,

i have paid 30x3 = 90k uptill now , my policy states that ,

if u surrender the policy before 1 year u get nothing -

after 1 year but less than 2 years - u get 25% of the amt u paid

after2 years but less than 3 years - u get 40%

after3 years u get 92% of the fund value or NAV (net asset value as its called)

as of now after paying 90k in 3 years the fund value is 1,20, 864
so according to them if i surrender now i ll get 92% of 1,20,864 = 1, 11112/- something finally which i am going to do this year , iam going to surrender and get 92% of the fund value ,

@ 6 pack : please read ur policy terms carefully , since u have paid premium regularly till 3 years u shud get atleast over 90% of the fund value , u can check online wats d current fund value of ur investment

i just dont uderstand how my dad was coaxed by the rep to invest 30k annually for a period of 26 years

i was 24 when the policy started and i wud have to keep paying up till the age of 50 :P , long way to go , i am surrendering it this year and take watever they give me and invest the amount over 1 lac in a fixed deposit, guaranteed returns

even i am not so well versed with these investment things , was having a discussion with my dad earlier today how to get rid of this , he tried to explain me all this and says he was conned/duped by the agent, he also told me every policy has a 15 day free look period but after signing for the policy it takes them more than 15 days to send them the policy statement to our postal address , so before he cud read anything the 15 day period was over and we were stuck
 
I have paid 3x premiums also. They had said it had a lock-in of 3 years. Can I surrender the thing and get back the cash. I do not care, just want to end it. Not willing to wait for an optimized time/situation.

Will do something else this year for 80C.

It is showing:

Fund Value: 130201.09

NAV DateL 22/02/2011

Why the heck is it so low, that I paid 65K x 3...??
 
^ after paying the 4th premium u wud complete the total of 3 years and then u can surrender it and take watever the policy terms and conditions states , be well versed with ur policy stament before going to the insurance agents or complay to surrender it or is there any way to surrender the policy online and get the funds transferred immediately to ur account , if so please tell me guys

it is going to be along hard fought battle against these agents to get our money back
 
^^

But I remember the agent had told me that I can pay 3 premiums and the policy will self run...blah blah blah. I remember the self run part, AND that after 3 premiums I can surrender it, and get back the cash.

Now what..? Guess will contact him. Just saw the fund value now.
 
asingh said:
I have paid 3x premiums also. They had said it had a lock-in of 3 years. Can I surrender the thing and get back the cash. I do not care, just want to end it. Not willing to wait for an optimized time/situation.

Will do something else this year for 80C.

It is showing:
Fund Value: 130201.09
NAV DateL 22/02/2011

Why the heck is it so low, that I paid 65K x 3...??
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then i guess u have paid only 2 till now , and wats d meaning of self run , i dont know ... :P , others please pour in some suggestions if u know

agents only mislead people , they will tell u things which are not even there in the actual policy terms

they only show u one side of the coin
they get the person booked to the company and get their commission and tata bye bye , the agent who sold me the policy doesnt even work with icici anymore , now wat to do :P
 
6pack said:
^ so if i surrender it now, i would take a loss of 25k upfront? while the market has increased in these years i have to bear a loss? shit.
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That's not what they say. They say that you'll get at least 15K back. But the actual surrender value is usually computed after you surrender the policy. If you have online access, they might show you the surrender value of the policy. But the exact amount returned to you could be a slight bit more than that.
 
@Connect:

No I have paid three. Am sure of that. Is it because the NAV DATE is showing as today -- 22/02/2011. Probably replication will take a while to the system. But darn damn sure about my 3 payments. One was DD, rest two were via the SP portal. Their system is showing my three payments.

Anyways, thanks to the OP for opening my eyes.

Wish had chosen my investment(s) as wisely as I buy hardware. :(

EDIT:

By self run he meant, that the policy will pay for itself or some sh$$ after first 3 premiums have been furnished by me.
 
"Self run" is just another BS. Once you finish paying 3 premiums, you have holdings in the form of units. What they say is that these units left untouched will grow along with the market even if you don't pay premiums. In Mutual funds, all the charges are reflected in the NAV and hence your units remain the same. What used to happen with my ULIP was that the units were canceled in lieu of the charges. So, even if that particular fund gives 30%, your no of units is lesser and hence you may only get 25% return. But the brochures and charts will show only the "fund performance", but that's not "your money's performance". If left alone, the fund will grow, but charges will keep eating into your unit holdings. When they say ULIPs are long term products, they MEAN it - as in unless you pay regular premiums and remain invested with us for the next 7 years at least, sorry about your money! At least this is my experience I did come out with the paid amount intact, but with a profit which is less than the FD rate that too during the golden period of the last bull run 2005-2008. I could have invested that money in an Index fund and made more money :(
 
Guys guys guys,

Dont mix a ulip plan to a pension plan... Altogether different purpose here. When we talk to vanilla ulip or pension plans, we are really talking about a good 20 yrs or so.

Now where are the advantages of taking a good ulip plan... First of all, if ulip, make sure you opt for one with the ability to switch portfolio(details read below) and one with a low back end cost, period...

Front end cost is the upfront deduction done in units at the time of first premium and subsequent premiums and back end is amc, management fees, mortality cost etc.. As of now, ulips are completely tax free whilst pension plans aint... At maturity in a pension plan, you gonna get taxed, whilst a ulip can serve the same purpose through systematic withdrawals and have these withdrawals completely tax free.

Someone above mentioned hdfc pension... imho hdfc makes probably the best pension plans.....

Now whats a fund or portfolio switch...... its a salient feature in certain ulips or pension plans to allow the customer to switch between funds, for eg: if you are currently 100% in equity and are expecting a bad budget, you can switch immediately into a debt portfolio without any tax implications and ride out the possible fall of market. Incase the mkt doesnt fall, you still make ur 6-8% on debt on actuals and can move back to equity.. This switch is not possible with mf's and hence this is how you can make a ulip give you much higher returns over a long period over mf's.

Mortality cost is more or less determined by the insurance cover taken and is per standard irda guidelines, hence no rd required here. Back end amc is imp cause a.25% v/s say a 1.5% over 20 yrs will make a huge difference in your corpus...
 
Guys please reads the docs before signing them, after all it's your hard earned money.
I believe the 15 days look period is still valid. Forget your agent most probably he'll not show up or he'll add more delays, go to the bank directly and cancel the policy.

If you still want to find a better way to cancel the policy, call some other bank agent, may be HDFC and inform him you want to invest in a HDFC fund but want to dis-invest from ICICI ULIP first, ask him how to do it. He'll suggest the best way to come out, once done say bye bye to both.
 
I found this in the offer document
surrender2.gif


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Sent mail to hdfc asking exactly how much i'll get. wonder if they'll even reply. these bank guys become deaf when you ask about closing ac with them.

would i get 30960 or less according to above table? :huh:
 
But i still dont understand why u guys want to surrender ur Life insurance plans. Thats what u folks are talking abt r8?

Why? isnt long term the idea behind that?

All my 80C plans are in LIC alone. You guys are making me worry. :S.

And also.. For one of the insurance i have(Got 2).. they will pay me 2 Lacs every 5 years(I can use this amount to pay say next 3 or 4 years of premium r8?). and after 21 years the actual maturity amount. I pay like 60k for that a year. :S. you guys are saying that its a very bad idea.

So what else is there for 80C other than FD/insurance?

The above said LIC policy was started this month only. :S. And another smaller one for around 2 years..

You thoughts?
 
esanthosh said:
If I understand correctly, there's a 15 day free look period for every insurance policy. You can surrender the policy within that time frame without losing money. Clarify this with your agent and feel free to do so.
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yes this is true most policies have a 15 day look in period. u can surrender the policy within the 15 days.
Also such agents must be strictly dealt with. Try to lodge complaint with the policy provider or send in ur complaint to pehredar@network18online.com.
Network 18 has a dedicated show for such problems. Such agent must be exposed.
 
m-jeri said:
But i still dont understand why u guys want to surrender ur Life insurance plans. Thats what u folks are talking abt r8?

Why? isnt long term the idea behind that?

All my 80C plans are in LIC alone. You guys are making me worry. :S.

And also.. For one of the insurance i have(Got 2).. they will pay me 2 Lacs every 5 years(I can use this amount to pay say next 3 or 4 years of premium r8?). and after 21 years the actual maturity amount. I pay like 60k for that a year. :S. you guys are saying that its a very bad idea.

So what else is there for 80C other than FD/insurance?

The above said LIC policy was started this month only. :S. And another smaller one for around 2 years..

You thoughts?
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Not life insurance plan - its pension plan for me, plus thinking of closing down two insurance plans and just getting a term plan where i wont get money back but will insure myself for higher amount like 25-30 lacs.

Main difference here is a life insurance plan will give you only one specific amount. it wont give you higher returns down the line in 20-25 years when that amount which looks like a big amount now will be paltry then. All these plans are made to be just that. they will just give you back the premium amount you paid plus some more maybe max 2 lacs more in that 20 year term.

Don't know about the other guys, but seems they too are talking of pension plans. Pension plans is basically useless if it wont give you sufficient returns when you retire.
 
6pack, i don't think u still understand 3 pages down the thread of how these plans work. There is nothing wrong with a ulip provided it serves your long term purpose and financial goals. I strongly suggest you sit down with someone who has a good knowledge of finance, financial products and is good with number crunching on the excel to get a better idea of how these things work. Depending on ones needs, a ulip endowment or 2nd beneficial plans have a serious benefit over a vanilla term plan + MF in the long run.

@m-jeri dont know your plan but if your purpose is long term, nothing wrong with a ulip. Also withdrawals don't make any sense, it simply disturbs the compounding effect and in the long run only reduces returns
 
6-pack started off with a ULIP then decided to pull out of it in favour of ? A MF.

His plan is to make the most after 20 years.

Is this correct 6pack ?
 
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