My son has been advised by ICICI advisor to buy ICICI Elite Wealth Scheme II. His objective is investment, more than insurance or tax saving. The reasons I was given are that it gives annualized returns better than FD and is less risky than mutual funds. To get such returns one should stay invested for 20 years, although the lock-in period is five years of premium payment. My father had a nasty experience with Kotak Mahindra scheme where he stands to lose his first year premium of ₹1 lakh as he could not continue payment for the next two years. Please advise on ICICI Pru Life Elite Wealth and Kotak Mahindra.
- BVM Rao
If your son's basic objective is investment, he has got a wrong product. ICICI Pru Life Elite Wealth II is an insurance-cum-investment policy with high charges. For more details, read: ICICI Pru Elite Wealth II.
Ask your son to buy a pure term life plan to secure an adequate life insurance cover. Also, ask him to choose a top-rated diversified equity mutual fund for investments. He can start a Systematic Investment Plan (SIP) in one or two diversified equity funds to meet his long term goals. Click here for best diversified equity fund.
We can't comment on the Kotak Mahindra scheme because you haven't provided the name of the product.
This article was originally published on February 15, 2016.
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