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Cheaper, but Still Not Worth It

New ULIPs are comparatively cheaper, but they're still not worth investing in. Find out why

My friend has recently invested in ICICI Life Maximiser v Elite. He is investing ₹2 lakh a year for 5 yrs. He is suggesting the same plan to me but I am not keen as ULIPs had earned a bad name earlier. He is saying that it is not so now. Please guide me if ULIPs are better now and how long I have to stay invested?
- Manhar Popat

New ULIPs that is the plans issued after September 2010 are comparatively cheaper relative to older ULIPs. But they are still not worth investing in. ULIPs have a limited track record on which to judge returns, require you to lock in for 5 years and also tend to be more opaque than mutual funds. We stress that it is best to keep your insurance and investments separate. Keep your financial planning simple and avoid complicated products for ease of management.

Moving to ICICI Prudential Life Elite II Plan, it is no different from its peers. If we take the first year, it charges over 6 percent as total expenses which in itself is a good reason to stay away. Buy an adequate term insurance if you are an earning member and have financial dependents. Start investing in mutual funds preferably through the systematic route. To start with, go for highly rated balanced funds such as HDFC Balanced Fund or Franklin India Balanced Fund. You can also use the 'Fund Selector' tool on our website to find an appropriate fund for yourself. You may later move on to other categories depending on your risk appetite and goals.



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