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Unit 13: Mutual Funds and Insurance Services
As it's too early to predict the product structure, let's look at a case where he buys a new Notes
ULIP for a nine-year term and it has a 20 per cent premium allocation and other charges for
first two years. If the ULIP earns 10 per cent net of charges, the maturity value will be ` 13.7
lakh.
If he invests the old policy proceeds of ` 61,000 after two years at a net interest of 10 per
cent the maturity value will be ` 1.20 lakh. His investment would then be worth ` 15 lakh,
still short of the sum he would made on his older policy. Hence it is advisable for the
investors to continue with the current policy since it has already suffered charges.
Question
Make a critical analysis of new guidelines issued by IRDA form customers as well as
insurance companies' point of view.
Source: http://www.thehindubusinessline.in
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