Edelweiss Tokio Wealth Plus is a relatively low-cost ULIP provided by Edelweiss Tokio Life Insurance. It has a term of 10-20 years and a premium payment term of minimum five years. It has no premium allocation charge or policy administration charge and allows free switches between ULIP funds (which are also free of tax). These ULIP funds have also performed well, as the figures below show. However, ULIPs also carry a ‘mortality charge’ that is levied on the insurance component of the ULIP. This makes them unsuitable to those who have purely investment needs.
The ULIP value is calculated by multiplying NAV with a number of units held. You can get the maturity value as a lump sum or over a period of 1-5 years. The phased withdrawal is done by keeping the balance money invested in ULIP funds making it similar to a mutual fund systematic withdrawal plan (SWP).
Highest of ULIP value, sum assured or 105% of all premiums paid. Sum assured is 10 times annual premium.
|Premium Allocation Charge||None|
|Policy Administration Charge||None|
|Fund Management Charge||1.25%-1.35%|
|Discontinuance Charge||None after the fifth year. But you must either surrender the policy, make it paid up (with reduced benefits) or revive the policy|
|Mortality Charge||As per complex formula given|
|Premium Redirection Charge||None|
|Partial Withdrawal Charge||None, however only allowed after 5th year and fund value cannot fall below 105% of all premiums paid|
Life Stage and Duration Based: This strategy allocates money between equity and debt taking into account your age and the remaining policy term.
Self-Managed: You can allocate your money between the funds listed below in any proportion.
As you can see, all of the ULIP funds have beaten their benchmarks and performed well. The data for the midcap fund, however, is only for one year.
|Fund||Benchmark||Fund 5 yr CAGR %||Benchmark Return %|
|Equity Large Cap Fund||Nifty 50||16.6||12.6|
|Equity Top 250 Fund||Nifty 200||19.7||14.4|
|Equity Mid-cap Fund||Nifty Freefloat Midcap 100||14.14*||12.2|
|Managed Fund||30% Nifty 50 and 70% Crisil Composite Bond Index||12.4||9.5|
|Bond Fund||Crisil Short Term Bond Fund Index||8.9||8.3|
*One year returns. Source: Funds Factsheet as of 30th April 2018
You also get ‘extra’ allocations of 1% of your annual premiums for the first five years of the policy. Thereafter you get extra allocations of 3% from year 6 to 10, 5% from year 11 to 15 and 7% from year 16 to 20