I am a regular reader of Value Research. I want to know your thoughts on HDFCLife Click2Invest. There is no Admin charge, allocation charge. It is charging only around 1.3 per cent as fund management charge. It looks cost effective. Main advantage in this plan is that I can switch between various funds. This is missing in MFs.
- Rahulkumar Patil
HDFC Click2Invest is a unit linked policy. It only charges for fund management and insurance component. Though it charges less, it has some other drawbacks:
Five year lock-in. If in case your finances do not allow to pay premiums and wish to discontinue, your money would be shifted to discontinued policy fund which will earn you a minimum interest at rate of 4 % p.a. You will not be able to withdraw before the completion of five policy years.
It charges a high premiums for the insurance cover.
Lack of freedom to switch to other policy if this policy does not perform as expected. This policy only allows you to switch in between 8 funds, but a mutual fund or other investments would allow to switch to other funds or redeem and reinvest in some other investment vehicle in case of poor performance.
It is always better to keep insurance and investment separate. Buy a term plan and invest in mutual funds or other saving instruments to meet your various financial goals in life.
This article was originally published on January 08, 2016.
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