Life Insurance ​
Buying Early is good ​
- Dependents will increase later
- Premiums might get locked in.
- Lifestyle diseases can lead to rejection by companies.
ULIPs vs Term Insurance ​
Unit Linked Insurance Policies are investment + insurance policies.
- Even the best ULIPs give ~5-6%
- Better to put it in a Term Insurance + Mutual Funds (eg, index funds give around 12%)
ROP ​
Return of Premium plans
- GST is not returned
- The premiums are higher I'm conflicted on this. Experts say it is better to pay the lower price and put the rest in a fund and get a higher profit. But then, the rest of the money is worthless. So I made this Google Sheet: https://docs.google.com/spreadsheets/d/1piGBNDwpKb_6Hu7YQsw2kQHhrZUWRDcj1pidOM4LI3c/edit?usp=sharing
| Year | ROP Premium | ROP Bonus | Non ROP Premium | Investment | YoY (8%) | YoY (10%) |
|---|---|---|---|---|---|---|
| 25 | 25000 | 5000 | 15000 | 10000 | 10000 | 10000 |
| 26 | 25000 | 5000 | 15000 | 10000 | 20800 | 21000 |
| 27 | 25000 | 5000 | 15000 | 10000 | 32464 | 33100 |
| 28 | 25000 | 5000 | 15000 | 10000 | 45061.12 | 46410 |
| 29 | 25000 | 5000 | 15000 | 10000 | 58666.01 | 61051 |
| 30 | 25000 | 5000 | 15000 | 10000 | 73359.29 | 77156.1 |
| 31 | 25000 | 5000 | 15000 | 10000 | 89228.03 | 94871.71 |
| 32 | 25000 | 5000 | 15000 | 10000 | 106366.27 | 114358.88 |
| 33 | 25000 | 5000 | 15000 | 10000 | 124875.57 | 135794.77 |
| 34 | 25000 | 5000 | 15000 | 10000 | 144865.62 | 159374.25 |
| 35 | 25000 | 5000 | 15000 | 10000 | 166454.87 | 185311.68 |
| 36 | 25000 | 5000 | 15000 | 10000 | 189771.26 | 213842.85 |
| 37 | 25000 | 5000 | 15000 | 10000 | 214952.96 | 245227.14 |
| 38 | 25000 | 5000 | 15000 | 10000 | 242149.2 | 279749.85 |
| 39 | 25000 | 5000 | 15000 | 10000 | 271521.14 | 317724.84 |
| 40 | 25000 | 5000 | 15000 | 10000 | 303242.83 | 359497.32 |
| 41 | 25000 | 5000 | 15000 | 10000 | 337502.26 | 405447.05 |
| 42 | 25000 | 5000 | 15000 | 10000 | 374502.44 | 455991.76 |
| 43 | 25000 | 5000 | 15000 | 10000 | 414462.64 | 511590.94 |
| 44 | 25000 | 5000 | 15000 | 10000 | 457619.65 | 572750.03 |
| 45 | 25000 | 5000 | 15000 | 10000 | 504229.22 | 640025.03 |
| 46 | 25000 | 5000 | 15000 | 10000 | 554567.56 | 714027.53 |
| 47 | 25000 | 5000 | 15000 | 10000 | 608932.96 | 795430.28 |
| 48 | 25000 | 5000 | 15000 | 10000 | 667647.6 | 884973.31 |
| 49 | 25000 | 5000 | 15000 | 10000 | 731059.41 | 983470.64 |
| 50 | 25000 | 5000 | 15000 | 10000 | 799544.16 | 1091817.7 |
| 650000 | 130000 | 390000 | 260000 |
Even with a bonus of 5k on a 25k premium, I'm getting a total of 7,80,000. With a YoY of 8%, by getting a non-ROP scheme I'm ending up with 7,99540. It makes sense. Although I seem to be losing ~4L, I'm gaining ~1L in the long run.
Zero Cost Plans ​
Zero cost plans are like ROP plans without extra cost. So, pay 15K, get 15K scheme. I'm confused on this.