By Vipin Agnihotri
The main advantage associated with Birla Sun Life’s new Dream Plan is it gives you a guaranteed maturity benefit that you set yourself. Birla Sun Life’s new Dream Plan is basically a top-down plan meaning that you set a target at the completion of the term and pay the premium on the basis of your target.
In an ideal scenario, a small sum is directed towards your insurance needs, which you can enhance depending on your needs. The policyholder is always guaranteed the maturity amount chosen and because of this he or she can plan his requirements.
In general, the policy period can vary from five to twenty five years but only for individuals between 18-60 years of age. It has come into the notice of The India Street that there are three choices under the guaranteed maturity benefit scheme, namely, 100 percent, 200 percent and 300 percent.
Fund values and guaranteed values will be minimized every month by reducing the units. It is worth mentioning in this regard that there is a fund management charge of 1 percent per annum. Talking about the limitation of Birla Sun Life’s new Dream Plan, for a basic sum assured, the charges are quite steep.
It is 8.45 percent for the first three years in a term of five years for a basic sum assured of Rs 1,133 and 12.26 percent for the remaining under the 100 percent maturity option. Remember that these charges vary as per different bands set under the policy. In my opinion, the overheads are very steep and the guarantee of 3 percent is not too exciting. Although, the plan does allow you to choose a mix of targets and options on offer- but that by itself does not really make it a dream plan.
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