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.
