What is a advantages and disadvantages of ICICI Life Stage RP ?

Question

What is a advantages and disadvantages of ICICI Life Stage RP ?

Answer 1

I understand that ICICI Life Stage RP is a ULIP policy. ULIP is the highest selling financial product in the country. But unfortunately it is also the most mis-sold product. There are no real advantages over separate insurance & separate investment products, as you will see from the details, below. But there are some hard disadvantages, when you compare the returns over the long term. Read on to learn, just why?

No agent will ever tell you that the upfront costs are as much as 30% in the initial years. Suppose you have taken that ULIP policy with a Rs. 10000 annual premium. Then out of your Rs.10,000 Rs.3000 would have gone towards agent commissions, fund management charges, admin charges, etc. etc. That implies only Rs. 7000 is getting invested in the market! If you understand the compounding effect of money (if not read this article Power of Compounding at http://www.valueresearchonline.com/story...

you will realise how big a financial cost is thus hidden from you.

Next whatever insurance life cover you are getting can be had at approx. 1/10th the cost thru a separate Term Plan cover. Read why Insurance and Investment should not be mixed here at

Investments? Insurance? Or both?

http://www.personalfn.com/detail.asp?dat...

Insurance vs Mutual Funds

http://www.valueresearchonline.com/story...

Now that you are more educated on how there are far better financial instruments to multiply your money (and separate Term Plan covers to take care of Insurance needs), you know that ULIP is not what you want to continue with, certainly not for next 15 years. Continuing with high premiums is even more unwise (than losing some money by surrendering) and over the long-term this could hurt your finances a lot more.

For insurance cover, take the lowest premium Term Plan cover. Use the balance to invest in reputed 5-star rated Mutual Funds. Top Rated Funds

http://www.valueresearchonline.com/topra...

Another signifcant aspect to note is that ULIPs don't have a long track record to compare as have some reputed Mutual Funds over 10-15 years, as you would have seen above. Besides ULIP track records are not in the public domain like you can find for any mutual fund:-). There lies the full story. Hope you are convinced by all this info. If yes, spread the word around!

Cheers!

Answer 2

Sujatha,

There are two important points you have to consider when going with a ULIP. One is cost and second is fund performance.

cost comprising Premium Allocation Charges, fund management charges and policy administration charges.

You can ask the policy type and check the similar policy from various companies to identify whether the said policy is costly or not.

You can ask for a fund performance illustration from the life insurance company office and identify which is the benchmark for this fund and compare the returns with that bench mark.

These are simple and possible options to identify the status of a policy. Inform me if you have any doubt at any point.

In my opinion, this policy is a laggard in the sense of fund performance and you will get more better one.