Cap on ULIP charges: How it affects YOU

AFTER much heartburn over high fees and charges on ULIPs (unit linked insurance plans), there's finally some good news for investors! The insurance regulatory body, the IRDA, has implemented well defined changes that can make a significant impact for investors looking to invest in ULIPs. According to the norms, there will be a cap on overall charges that the insurance companies can impose upon the ULIPs.

The norm
For all ULIPs which have a maturity of up to 10 years, the difference between the gross yield and net yield would have to be maintained at 300 basis points or 3 per cent. Out of this, the investment management fee would not be more than 1.5 per cent. For ULIPs with a tenure longer than 10 years, the overall cap would be 2.25 per cent with an investment management fee cap of 1.25 per cent.

Stay secure: Plan for contingencies before planning for future goals

February has always been a month of great excitement in India, especially with investors who eagerly await the annual budget. As the year comes to a close, it is always good to know how well did you did in the year  and what you plan to do going forward.

But as investors were busy deciphering the path laid down by the budget (which was hardly anything), we saw a mammoth earth quake shake the world and pretty much destroy the entire eastern part of Japan. The earthquake has not only caused major loss of life and property but also has had a major impact on global financial markets. For the first time in history, the G7 countries had to intervene in the forex market to ensure stability. Japan infused record funds into its economy. Indian markets have not been spared either.

Top Mutual Funds in India

Scheme Name Nature 1 M % 6 M % 1 Y % 3 Y % HDFC Long Term Equity Fu Equity -2.30 -8.74 15.95 10.45 ICICI Prudential Banking Debt 0.82 4.26 7.58 - HDFC Balanced Fund - Gro Balanced -0.47 -4.16 16.64 16.01 HDFC MIP - LTP - Growth MIP -0.43 -0.49 7.75 11.99 Escorts Liquid Plan - Gr Liquid 0.83 4.92 8.32 7.83 HDFC Long Term Advantag ELSS -2.45 -11.05 13.97 10.48 SBI Gold ETS ETF 4.64 8.38 25.44 - Religare Gilt Fund - Lon Gilt 0.33 2.02 13.71 5.50 HDFC Index Fund - Sensex Index -4.17 -10.46 10.76 8.71 *Note:- Returns calculated for less than 1 year are Absolute returns and returns calculated for more than 1 year are compounded annualized.

Source