Outlook Money – 01.03.2018

Fund Name

Debt &

Equity Mix

Risk

Level

Exide Life Midcap Fund

Debt: 0% to 80%

Equity: 75% to 100% Very High

Money Market: 0% to 25%

Exide Life Prime Equity Fund

Equity: 90% to 100%

Debt: 0% to 10% High

Money Market: 0% to 10%

Exide Life Active Asset

Allocation Fund

Equity: 20% to 100%

Debt: 0% to 80% High

Money Market: 0% to 80%

Exide Life Growth Fund

Equity: 40% to 60%

Debt: 0% to 60% Medium

Money Market: 0% to 20%

Exide Life Balanced Fund

Equity: 20% to 40%

Debt: 0% to 80% Medium

Money Market: 0% to 20%

Exide Life Secure Fund

Equity: 10% to 20%

Debt: 0% to 90% Low

Money Market: 0% to 20%

Exide Life Preserver Fund

Debt: 75% to 100%

Low

Money Market: 0% to 25%

Wealth of Assurance

There are seven self-managed fund options to choose from,

depending on the customer’s risk and return profile

quite high when compared to other

investment products” says Jain.

Taxation: Tax benefits are

available under Section 80C

on premiums paid up to a

maximum of `1.5 lakh and there

is an additional tax benefit under

Section 10 (10D) of the Income

Tax Act, 1961, on the maturity

proceeds of your policy.

Summing up: Though this is a

good product in several respects,

Iyer suggests that one should not

mix investment with insurance. He

recommends investments that are

free for one to enter and exit,

with minimum paperwork and

associated costs.

[email protected]

ULIP does not attract LTCG
under the latest budget
proposals. Does this make it
a more attractive investment
proposition as compared to
mutual funds?
ULIPs are an ideal investment
option for customers who have a
longer term horizon (five years and
above). The recent budget has made
ULIP an even better investment
option. It is now clearly better
placed as compared to Equity
Oriented Mutual Funds, including
Equity Linked Savings Schemes/
Tax-Saving Funds (ELSS).

they have seven funds to choose

from, including that of a mid-cap

equity option with unlimited free

switches between funds,” says

Chenthil R. Iyer, founder and

chief strategist at Horus Financial

Consultants. For an investor

this provides a wide variety of

investment options.

“We tend to not manage ULIPs

actively, however, if an investor is

using these switches, they can do

so without incurring capital gains –

which is great, ” says Shwetha Jain,

founder, Investography. For those

who do not wish to actively manage

their funds, the automated fund

switching strategies can come in

handy. Under the Automatic Asset

Rebalancing Strategy the percentage

of equity exposure in your

investment is high at the start of the

policy and then gradually decreases

as you approach your goal. While

the Systematic Transfer Plan ensures

that equity investment is done in a

systematic manner, thereby ensuring

rupee cost averaging.

Sum Assured: The insurance

cover available is only 20 times the

annual premium, which is quite low

considering the target audience. For

those aged above 45, it is even lower,

at just ten times the premium. Iyer

has a special word of caution for

people aged 45 and above. “Do not

go for the cover of seven times the

annual premium as it would result in

you losing the benefit of the maturity

proceeds being tax-free,” he warns.

Charges: Charges are quite

comprehensive. For annual

premiums greater than `5 lakh,

the first year’s allocation charge is

zero. Policy administration charge

of 0.24 per cent per month is a

recurring charge for only the first

five years (with a cap of `500 per

month). Fund management charges

vary from 1 to 1.35 per cent per

annum for debt and equity funds

respectively. “While the charges are

lower than older ULIPs, they are still

http://www.outlookmoney.com March 2018 Outlook Money 61