SBI Saral Maha Anand Review
SEBI has banned all the ULIPs because the Investment component of ULIPs is highly unregulated and opaque. Followed by this, IRDA also has banned ULIPs because of its mis sellings.
The Insurance companies are hiding the information from its customers and the ULIPs used to give just 5 times the life insurance cover than its annual premium. But now, Insurance companies have started modifying ULIPs.
Recently, SBI has launched new ULIP scheme – Saral Maha Anand Policy.
This is a revolutionary scheme in the history of Indian Insurance cum investment products markets. Because this ULIP scheme has several changes than the traditional ULIP policies.
Key Features of the Policy:
- The minimum annual premium is Rs 15,000 and the maximum yearly premium is capped at Rs 29,000.
- The sum assured component ranges from 10-20 times of the annual premium and is restricted to a maximum of Rs 7.5 lakh.
- SBI Life Maha Anand is meant for investors in the age group of 18-55 years. The maturity age is up to 65 years. Like most other Ulips , policyholders can opt for a yearly, half-yearly, quarterly or monthly payments.
- The product offers customers four investment options depending on their risk profiles: Index, Equity, Balanced and Bond fund.
- It also offers partial withdrawal of up to 15% of the fund value after completion of five years. Investors can use this window to meet emergency liquidity needs.
- Charges: Premium allocation charge is 6.25% of the premium amount for the first year and it goes down to 3.75% between the second and fifth year, and from thereon, further to 3% until the 10th year of the policy. The policy administration charges are Rs 33.33 per month. The fund management charges are 1.25% for the index fund and balanced fund, 1.35% for the equity fund and 1% for the bond fund. Financial advisors say that the cost structure of this regular Ulip is still high despite the flexibility of low premium. Hence, if an investor wants to make the most out of this product, s/he has to invest for the maximum possible term and invest a higher amount to earn decent returns.
The two revolutionary changes in this ULIP are,
01) 10-20 times life insurance cover than the annual premium (Which was just 5 times previously)
02) Only 6.25% Premium allocation charges (Still high) which was previously 20-50% on First premium.
Thus, this shows that the ULIPs are changing. Indian Investors are now aware, more informed and financially smarter than before.
I am really happy to see such kind of positive changes in ULIPs.