Post re-introduction of LTCG on equity mutual funds, a few life insurers are launching ULIPs with new features to attract investors.
While Edelweiss Tokio Life has launched Edelweiss Tokio Wealth Plus with a children goal planning feature, Bajaj Allainz Life has come out with Bajaj Allianz Life Goal Assure, which allows return of premium.
Tarun Chugh, MD and CEO, Bajaj Allianz Life Insurance, believes that the return of mortality charges of Life Goal Assure, lower management cost and low cost makes the Life Goal Assure better than mutual funds. “With the re-introduction of LTCG on equity mutual funds, it gives an upper hand to ULIPs. Also, we are the first in the industry to return the mortality charges after the tenure expires. The tax benefit in ULIPs, along with the mortality cover, makes it a superior product than mutual funds,” Tarun said.
“From a cost perspective, the fund management cost will be capped at 1.35% which is on par with direct mutual funds. Our ULIPs have delivered attractive returns and have beaten the benchmark indices over a longer horizon of three, five and 10 years. Also, our funds have rated four and five stars by Morning Star,” Tarun added.
ULIPs typically charge fees under various heads – policy/administration charges, fund management fee, mortality charges and fund allocation charges.
To keep the cost of distribution in check, the company will leverage its online channel to distribute the product. “Although only 0.50% of our business comes through the online portal, we are the second largest player in terms of online business. We revamped our website to make it easier for customers to buy this product online,” Tarun said.
Currently, the life insurer has five ULIP products including ‘goals assure’.