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Personal Finance

Do NOT buy LIC's Money Plus ULIP

It seems that LIC advisors have been distributing pamphlets saying that a plan named LIC Money Plus, a ULIP, demonstrating how you can invest only Rs. 10,000 annually for three years and get back Rs. 16 lakhs after 20 years. This is absolutely fraudulent advise because ULIPs cannot guaranteed results (they are market linked). Plus, this assumes an annual return of 25% which is WAYYY beyond anything that has occured in the last twenty years.

To give you an indication – no LIC endowment policy has made even more than 8% annualised in the last twenty years. 25% is (splutter, gasp) ridiculous!

IRDA has cautioned investors against this practice. Please do not go by such impressions. Please throw your advisor out on the street if he brings you such a pamphlet.

Read:
Original IRDA Press Release, articles from Outlook Money, DNA, Domain-B.

Look ONLY at this illustration:
http://www.licindia.com/money_plus_illustration.htm
(It shows you 6% and 10% returns only, that is all you should expect)

I firmly believe such pamplets are not the creation of a few advisors, but of some LIC officers as well. While it may managed well, there is no possibility of a huge return, and in three years, a lot of gullible investors who have put in their hard earned money will realise they have been conned and take out the money. This kind of redemption will affect the fund as well. In general I am against ULIPs because of their heavily loaded structure. So I would say:

You should NOT invest in LIC Money Plus at all. Beware.

  • Kaushik says:

    >Isn’t there some law against false claims in advertising – especially for investments? How many people get fleeced by LIC agents?

    Kaushik

  • Sivaprakasam says:

    >Pls send your email/contact# to sivaprakasam_p@yahoo.com. Let us meet/talk in ur convenient time.

  • Deepak Shenoy says:

    >aushik: There are, but of course the company has to be known as the source. They can say some agent created these pamphlets and they are unaware of such acts.

    Siva: deepakshenoy at gmail will work.

  • Deepak Shenoy says:

    >I’ve written about that rediff article specifically at:

    ULIP: Lining advisors’ pockets

  • Kaushik says:

    >http://www.rediff.com/money/2007/feb/02perfin.htm

    Another ULIP horror story!

  • Anonymous says:

    >Thank god to blogs, freedom of speech & reality !!!! I am glad some one spoke up about how fake some things are… thanks

  • sapansambalpur says:

    >Going by LIC’s some other ULIPs it can be said that Money Plus can give 25% growth.but such speculation has no meaning in erudite forums,We agree.The lure of ULIPs has goaded the Market.Past Performance may not be indicative of the foture.But many Mutual Fund Investors are looking at the past Performance of a particular Fund before Investing.It is also one of the premises to take a decision while Investing.NO HARM. SapanMishra,09437570479,website-sapanmishra.com

  • Anonymous says:

    >Hi guys,
    I have not check this blog before.

    I made an Investment on this product and incurred huge loss.
    Now looking for that LiC agent

    Not only LIC all the MF are fruads and look at the NAV
    as of now 06-NOV-08.

  • Anonymous says:

    >Hi guys,
    I have not check this blog before.

    I made an Investment on this product and incurred huge loss.
    Now looking for that LiC agent

    Not only LIC all the MF are fruads and look at the NAV
    as of now 06-NOV-08.

  • amarendar says:

    >My name Amarender Reddy, I invested in Money plus plan. What is the present unit rate of this policy. Normally I ask to you “how much we get after 20 years” Already I paid 20,000 rupees. As well as am I continuing this policy or not. please give advise to me.

    comment

  • Henry says:

    >Nice post. very useful

  • SK says:

    >Please do not take any LIC policy, While taking the policy you will be treated like GOD and once after taking the policy you automatically become a DOG at their door steps usually barking DOG. They literally make you cry for each and every thing from paying the premiums. I donot know once you die wheather the nominee will get your insured amount or not. For them to be safe on their audit pupose they shall ask the nominee to bring back the dead person alive once again infornt of them.

  • VIVEK says:

    >thanks …..can u tell me about lic jeevan aastha plan.i want to invest in this plan pls help me…..thanks aganin.

  • Anonymous says:

    >LIC policy are formulated to cheat the public by assuring huge returns. 30% of the investor money given for LIC Agent.LIC AGENT gain more than investor because he/she cheating the investor by giving sweet words.. Don't believe LIC Policy….

  • chandru says:

    >i was a fool to purchase LIC MONEY PLUS ULIP. This the way to fool the unsuspected customer like me. This is the biggest financial fraud by LIC of INDIA. THE CREDIBILITY OF LIC OF INDIA IS AT STAKE. AFTER THE BITTER EXPERIENCE ON ONE SHOULD GO FOR ANY POLICY WITH LIC OF INDIA. THE INSURANCE REGULATORY AUTHORITIES SHOULD BAN SUCH FRUDULANT ACTIVITIES BY LIC IMMEDIATELY.

  • Udayaraj says:

    >Gentlemen, why always blame the agent or in this case, LIC of India. Aren't we as investors also responsible. We are an equal party to such malpractices because we ourselves DO NOT WANT to listen to the TRUTH and wish to put our faith on such misinformation. It is a known fact that ULIPs cannot a.) guarantee returns & b.) There are additional charges etc which reduce the principle investments & c.) small duration i.e. 3 years. They have taken us for ride or WE have ALLOWED them to take US for ONE? Rest all are educated enough to soul search themselves. Udayaraj

  • Natasha says:

    >Thanks for sharing information! I appreciate the useful information which you discussed here and I enjoyed to read such interesting post.

  • Anonymous says:

    >MONEY PLUS IS ONLY ONE ULIP BY LIC NOT PERFORMING UPTO THE EXPECTATION. BUT FOR ANY ULIP, THE REAL GROWTH WILL BE AVAILABLE ONLY AFTER FIVE OR SIX YEARS. ULIPS ARE DESIGNED LIKE THAT. SURRENDERING THE POLICY AFTER THREE YEARS MAY NOT GIVE ANY PROFIT UNLESS IT IS A HIGH PERFORMING FUND.WE HAVE SEEN A RECESSION AND THE ECONOMY IS SLOWLY RECOVERING. MONEY PLUS WILL GIVE A BETTER RETURN IF THE FUND IS KEPT FOR A LONGER TERM.—MVN

  • Abhishek Jain says:

    >Hi Deepak,

    Read your article "ULIP Exits and the Sunk Cost Fallacy". Found it quite enlightening. In that you have done ULIP Exit analysis for Tata AIG Jeevan Lakshya Plus and ICICI Assure Wealth.

    Please can you add analysis for LIC Money Plus in that for a premium amount of 10,000 pa.

  • Lic says:

    >It is a good view and even independent view by the author in regards to LIC's Money plus. Thanks!

  • Gagan says:

    >It seems the internet is like the wall of an unmanaged public toilet. Any body can write anything and a lot of unconfirmed and miss-leading "information" keeps floating around.The problem is that most of us are gullible enough to take this information on face value and take decisions based on it.Please take care…Gagan Arora

  • Anonymous says:

    >I dont know the future of this plan. Even after 4th policy anniversory the NAV is below 12, even though the market rises near to 20K.
    Why this problem is with only money plus ? if you compare other lic ulip plans the nav is in good condition.
    Can anybody help me out how we can switch the fund from growth to secure?
    Please advise. chatboat@yahoo.com

  • Anonymous says:

    >Yaa, i have same openoin ,don't invest in this plan.
    i have also invested in this plan before 3 years,after 3years it's NAV is only 12 from base price 10.
    Even there is some charges if terminate this scheme.
    so best is to wait for some time and terminate this policy after 5 years.
    I think best is to invest in Mutual fund,no entry load & exit load.Your all money get invested,no deduction.
    In money plus they deduct some amount of your money as charge,some is moved towards insurance.Thats why we get low return.