ULIP Review: Aegon Life iMaximize Plan; does it maximise returns?Aegon Life iMaximize is an online ULIP and hence tries to leverage on a lower cost structure than traditional ULIPs. It only partially succeeds in this as the cost structure shows. It also lacks a reasonable suite of investment strategies in the ULIP funds. The performance of the equity ULIP funds has also been disappointing.

Maturity Benefit

You get the ULIP fund value. The fund value is simply the Net Asset Value (NAV) of the ULIP funds multiplied by the number of units.

Death Benefit

Option 1

Higher of 10 times annual premium or fund value.

Option 2

10 times annual premium and

  1. The company will pay all remaining premiums due to the policy
  2. The company will pay an amount equal to annual premium as income each year for the rest of the policy term
  3. The company will pay the fund value at the end of the policy term.

Note that option 2 will also feature additional mortality charges for these additional death benefit features.

Other features

Premium payment term is 5, 7, 10, 15, 20 years or as per policy term. Entry Age (7 years to 55 years – Option 1 and 18 – 50 years for Option 2). The minimum premium is Rs 36,000 for a 5-7 year term and Rs 24,000 for a longer term. For Option 2 it is Rs 24,000 below the age of 45 and Rs 36,000 above the age of 45.

Charges

Aegon Life iMaximize could have done more on this front, especially since its an online plan.

Type Amount
Premium Allocation Charge None
Policy Administration Charge Rs 100 per month
Fund Management Charge 0.5% to 1.35%
Mortality Charge Levied on ‘Sum at Risk’ as per a complex formula

The sum at Risk = Sum Assured – Total Fund Value

Number of free fund switches Four
Discontinuance Charge

(For premium above Rs 25,000. Similar structure for premium below Rs 25,000.)

1st year – Lower of 6% of fund value or 6000

2nd year – Lower of 4% of fund value or 5000

3rd year – Lower of 3% of fund value or 4000

4th year – Lower of 2% of fund value or 2000

5th year onwards – None

Investment Strategies

This ULIP has no investment strategies as such. You simply select a ULIP fund and invest. This is quite unlike the strategies resembling Systematic Transfer Plans (STP) or related to market level triggers available in other ULIPs.

Funds

The performance of Aegon’s long-standing funds becomes more relevant than the funds established less than three years ago. There are four such older funds, one equity, one balanced and two debt. Out of these, unusually, the debt funds have outperformed their benchmarks, not the equity funds.

Name Type Inception Date Performance Benchmark Outperform?
Bluechip Large cap. Equity at 80-100%. 22/12/2014 8.35% 7.52% Yes
Accelerator Multicap. Equity at 80-100%. 16/09/2010 7.89% 8.29% No
Opportunity Midcap. Equity at 80-100% 27/02/2017 16.81% 19.95% No
Stable Balanced. Equity at 20-80% 24/09/2010 7.25% 8.15% No
Secure Money market and short-term instruments. No equity. 05/09/2008 7.58% 7.54% Yes
Debt Govt and corporate debt. No equity. 20/08/2008 9.17% 8.02% Yes

Source: Aegon Life Insurance, Investment Newsletter for Feb 2018. Performance since inception.

RupeeIQ take

Aegon Life iMaximize simply doesn’t give you enough bang for your buck. The charges are low but not low enough; there are no investment strategies on offer and the equity ULIP funds have underwhelmed. You can do better with HDFC Click2Invest or Bajaj Goal Assure.

Author
Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at neil@rupeeiq.com.