BSLI Foresight Plan- Complete Review

KEY FEATURES


NATURE OF PLAN:

• ULIP with option of Guaranteed Minimum Maturity Benefits (GMMB) - similar like guaranteed   highest NAV Plans.
• Self-Managed Option:– Funds to be managed by investor by investing in different funds available.
• Guaranteed Option:- Investment in Foresight Fund with GMMB at Maturity. Highest NAV during first 7 policy year would be considered to calculate GMMB at maturity.

UNIQUENESS OF THE PLAN:
Lowest NAV during the year would be applicable for the Premium investment during that particular year and will be calculated on completion of 5th policy year.


FUND COMPOSITION:
11 Different Fund Available with different fund composition. But the GMMB is only with Foresight Fund. Asset Exposure of Foresight Fund is:
Asset Type                               Max Exposure                   Min Exposure
Equity and Related:                       100%                              0%
Debt/ Derivatives:                          100%                              0%

LIQUIDITY:

• Partial withdrawals: Only Only After completion of 5th year.
• Policy Surrender: Only After completion of 5th year.
• If Premium not Paid: If Premium not paid at any time during first 5 policy years, policy is considered to be discontinued and the fund value will be calculated by applying discontinuation charge and paid at the completion of 5th policy years.
• Loans Facility: available upto 40% of fund value. Interest rate applicable: SBI PLR + 2

FUND ANALYSIS

• Highest NAV Funds only guarantee “Return of Investment” not “Return on Investments”.
• Funds’ Portfolio are managed and allocated dynamically between equity and debt in such a way that the highest NAV attained is locked by moving a portion of equity holding to debt, whose maturity value will be equal to highest NAV attained till then.
• Over a period of time, equity exposures are bound to move to debt. The reverse, however, may not be possible as when equity markets fall, it may not be possible to move debt exposure to equity as they may be locked in to assure highest NAV.
• Peer ULIPs (guaranteed return): “Insure Smart Plan” (Canara HSBC Oriental Bank of Commerce Life Insurance) ICICI Pru Pinnacle Fund II etc. All these plans have more or less similar features. However, they differ in charges like Premium Allocation Charges, Fund Management Charges, Mortality Charges etc and fund management approach.
• Fund managers will not take high risk as he has to guarantee NAV attained during the initial policy years. This will result in lower return as compared to other pure non-guaranteed funds. However, these ULIPs are safe for investment and is suitable for Risk Averse Investors.

FUND DETAILS

Particulars                        Details

Entry Age:                         Min- 8 years, Max- 60 years

Minimum Premium:          Single Pay Option: Rs 2,00,000

                                          5 Annual Pay: Rs 1,00,000 p.a.
                                          (premiums can be paid in advance. Present discount rate 5%)

Maximum Premium:         No Limit

Policy Term:                    10 Years

Min Sum Assured:            Age Single Pay 5 Annual Pay

Below 45 Yrs:                  1.25 x Basic Premium 10 x Basic Premium

45 Yrs Above:                  1.10 x Basic Premium 7 x Basic Premium
Can also Choose Higher Sum Assured at Policy Inception

Riders:                           No Riders with this plan

Maturity Benefit:

Guarantee Option:          Higher of ‘Fund Value at Maturity’ or ‘Fund Value at Guaranteed Benefit’.
Self Managed Option:      Fund Value at maturity.

Death Benefit:                ‘Fund Value’ + ‘Sum Assured (reduced by partial withdrawals)’.

Partial Withdrawal:       Only After completion of 5th year.

                                       Min- Rs 5000; Max- no limit but have to maintain Fund Value = Rs 25000

Policy Surrender:         Only After completion of 5th year.

CHARGES

Policy Allocation Charges:             5% of Annual Premium.

                                                        Similar to other funds- no advantage with this fund


Policy Administration Charges:      No Policy Administration Charges.
                                                        Advantage with this fund.
  Fund Management Charge:

Foresight Plan

5 Year Pay Option: 1.35% pa + 0.40% pa = 1.75% pa
Single Pay Option: 1.35% pa + 0.25% pa = 1.60% pa

For Self managed plans
(other than guaranteed Foresight Plan) charges varies between 1% - 1.35%

charges are at high side as compared to other similar plans.

Discontinued Charges:
In Policy Year 1 Lower of 6% of Annual Premium or Face Value (Maximum of Rs 6,000)
In Policy Year 2 Lower of 4% of Annual Premium or Face Value (Maximum of Rs 5,000)
In Policy Year 3 Lower of 3% of Annual Premium or Face Value (Maximum of Rs 4,000)
In Policy Year 4 Lower of 2% of Annual Premium or Face Value (Maximum of Rs 2,000)
In Policy Year 5 Nil

Deducted from Total Fund Value at the time of surrender and 3.5%pa interest will be credit till the payment of amount Policy Year Foresight Plan
 Mortality Charges:

Mortality Charges Applicable as per Age and Gender. But the mortality charges are at higher end.

More than many similar fund like Insure Smart Plan (Canara HSBC Oriental Bank of Commerce) ICICI pinnacle Fund II etc.