I bought ICICI Pru Elite Life-SP - Maximiser Fund V on September 9 2014. My objective was to get tax benefits, so my CA gave me the contact of his friends from ICICI and he convinced me to buy this product given the tax benefits and insurance cover. Unfortunately I enrolled and have been paying premium of ₹5000 a month until now. Now I am getting a lot of negative feedback on this plan online. Should I quit now or continue? Please advise me.
- Vijai Kumar
ICICI Pru Elite is a unit linked plan which is similar to its peers and is an expensive option to make market linked investments. You have just paid three installments in this plan which is only around ₹15,000 as premium for this policy. So, it is better to stop paying the premiums and invest in good mutual funds instead.
It would be best not to go by online comments or feedback alone while making your investment decisions. However, we don't recommend ULIPs as a rule because it is not advisable to mix up insurance and investment. Term insurance is the best way to get a life cover and mutual funds are best suited to meet investments needs. Even low cost ULIPs do deduct mortality charges before investing your premium.
Costs apart, mutual fund score over ULIPs on other factors too. ULIPs have a 5 year lock in period and lack the liquidity of open end mutual funds. Though they are market linked plans and if the plan doesn't perform you should be able to switch to a better fund but they lack the transparency of open end funds, on NAVs, portfolios and fund manager strategies. We suggest you use the online Fund Selector tool to choose good balanced or equity funds to do an SIP for ₹5000.