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Should I continue investing in my HDFC Life Uday policy with 24k annual investment?

Ramalingam

Ramalingam Kalirajan  |8103 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 24, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Shah Question by Shah on Jul 11, 2024Hindi
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Hi Sir, I have invested in a policy of HDFC bank with name HDFC Life Uday. In this I have been investing 24K per annum. Same amount i have to invest for 8 years that will end up in 2026. Maturity time is 2030. Can you please tell me how much amount will i get on maturity.

Ans: You have invested in the HDFC Life Uday policy, a traditional, non-linked insurance plan. You are paying Rs. 24,000 annually for 8 years, with the policy maturing in 2030.

Understanding HDFC Life Uday
HDFC Life Uday offers a combination of savings and protection. It includes a guaranteed sum assured and potential bonuses. However, this type of policy has several disadvantages.

Disadvantages of HDFC Life Uday
Lower Returns: Traditional policies typically offer lower returns compared to other investment options. The returns may not keep up with inflation.

High Costs: These policies often have higher costs due to premiums covering both insurance and savings components.

Limited Liquidity: Traditional policies have long lock-in periods. Accessing your money before maturity can be difficult and costly.

Inflation Impact: The fixed returns may not keep pace with inflation, reducing the purchasing power of your maturity amount.

Complexity: The structure of bonuses and guarantees can be complex and less transparent.

Surrendering the Policy
Given the disadvantages, it may be beneficial to surrender your HDFC Life Uday policy and reinvest in more efficient options.

Surrender Value: Before making a decision, check the surrender value of your policy. This is the amount you will receive if you terminate the policy early.

Reinvestment Strategy: Consider reinvesting the surrender value in mutual funds. Mutual funds can provide higher returns and greater flexibility.

Benefits of Mutual Funds
Higher Returns: Mutual funds generally offer higher returns compared to traditional policies.

Diversification: Mutual funds invest in a variety of assets, reducing risk.

Liquidity: Mutual funds are more liquid, allowing you easier access to your money.

Professional Management: Funds are managed by experts who adjust investments based on market conditions.

Flexibility: You can choose from a wide range of funds based on your risk appetite and financial goals.

Investing Through a Certified Financial Planner (CFP)
Consider investing in mutual funds through a Certified Financial Planner (CFP). Here’s why:

Expert Guidance: A CFP provides personalized advice tailored to your financial goals.

Regular Monitoring: They continuously monitor and adjust your investments to optimize returns.

Comprehensive Planning: CFPs offer a holistic approach, covering all aspects of your financial life.

Final Insights
Given the lower returns, high costs, and limited liquidity of traditional policies like HDFC Life Uday, it may be wise to surrender the policy. Reinvesting in mutual funds through a Certified Financial Planner can provide higher returns, greater flexibility, and professional management. Review your surrender value and consult a CFP for personalized advice and a comprehensive financial plan.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8103 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 20, 2024

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I am having LIC of a 14 lakhs policy of Jeevan Anand paying premium of 71000. It's going to mature or complete it's 21years term. How much should I expect the maturity amount? Will I be be life covered post maturity amount withdrawal? Where should I invest this maturity amount?
Ans: Assessing Your LIC Jeevan Anand Policy
Understanding Maturity Amount
Your LIC Jeevan Anand policy is nearing the end of its 21-year term. Given a policy sum assured of ?14 lakhs and an annual premium of ?71,000, the maturity amount will include the sum assured along with any applicable bonuses. However, without specific bonus rates, an exact figure is challenging to determine. Generally, LIC policies like Jeevan Anand accrue bonuses over the years, which can significantly enhance the maturity amount.

Life Coverage Post Maturity
One key feature of the LIC Jeevan Anand policy is the continuation of life cover even after the maturity amount is paid out. This means you will still have a life cover equal to the sum assured (?14 lakhs) after the policy matures, providing continued financial security for your beneficiaries.

Investment Recommendations for Maturity Amount
Risk Assessment and Goals
Before deciding where to invest the maturity amount, consider your risk tolerance, financial goals, and investment horizon. Since the maturity amount is likely to be substantial, diversifying across various investment options is prudent.

Investment Options
1. Mutual Funds
Equity Mutual Funds: If you have a high-risk tolerance and a long-term investment horizon, consider equity mutual funds. They offer high growth potential but come with higher volatility.

Balanced or Hybrid Funds: For a moderate risk appetite, balanced funds invest in a mix of equities and debt, providing a balance of growth and stability.

Debt Mutual Funds: If you prefer low risk, debt funds are safer and provide regular income, suitable for short to medium-term goals.

2. Systematic Investment Plan (SIP)
Consider investing a portion of the maturity amount in mutual funds through SIPs. This helps in averaging the purchase cost and reduces the impact of market volatility.

3. Public Provident Fund (PPF)
For long-term, risk-free investments, PPF is a good option. It offers attractive tax-free returns and has a lock-in period of 15 years, making it suitable for retirement planning.

4. National Pension System (NPS)
NPS is another long-term investment option, especially beneficial for retirement planning. It offers a mix of equity, corporate bonds, and government securities with tax benefits.

5. Fixed Deposits (FD)
If you seek safety and assured returns, consider investing a portion in fixed deposits. Although returns are lower compared to equity, FDs provide guaranteed income.

6. Gold
Investing in gold through Gold ETFs or Sovereign Gold Bonds can provide a hedge against inflation and add stability to your portfolio.

Diversified Portfolio Approach
High-Risk Investments: Allocate around 40-50% in equity mutual funds or direct stocks for high growth potential.

Moderate-Risk Investments: Allocate 20-30% in balanced funds or hybrid funds for balanced growth and stability.

Low-Risk Investments: Allocate 20-30% in debt funds, PPF, or FDs for assured returns and safety.

Alternative Investments: Allocate a small portion, around 5-10%, in gold or other alternative assets for diversification.

Conclusion
Upon maturity of your LIC Jeevan Anand policy, you will receive a significant lump sum. Continue benefiting from life coverage even after maturity. To optimize this maturity amount, diversify your investments across equity, debt, and alternative options based on your risk profile and financial goals. Regularly review and adjust your portfolio to stay aligned with your objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8103 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 10, 2025

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Hi Sir , I have taken jeevan anand policy in 2005 with paying term 20 years but date of maturity showing as 2082 ( 100 years of life) means I can get money after 2025 completed else I will get maturity amount in 2025, please let me know
Ans: You hold a participating insurance policy with dual benefits: life cover and maturity payout.

The policy term is until age 100, ensuring lifelong coverage.

Your premium-paying term is 20 years, ending in 2025.

You will receive a maturity payout in 2025 if you choose.

Alternatively, you may keep the maturity amount invested in the policy.

If kept invested, benefits accumulate until policy maturity or claim.

Key Aspects to Evaluate
Life Coverage Beyond 2025
Post-2025, the policy continues to provide life cover until age 100.

The sum assured ensures financial security for your dependents.

Maturity Amount Usage
The payout in 2025 can address your financial goals.

Retaining the maturity amount earns additional bonuses over time.

Cost-Effectiveness of Continuing
Premium payments cease after 2025, reducing financial outflow.

Assess the policy's bonus and return rates for future benefits.

Assessing Financial Goals
Immediate Needs
Review current financial priorities like retirement planning or liabilities.

The maturity amount can supplement other investments.

Long-Term Growth Opportunities
Retaining the policy boosts long-term returns due to ongoing bonuses.

Consider the tax efficiency of keeping the maturity amount invested.

Alternative Investment Avenues
Evaluate reinvestment in mutual funds for potentially higher returns.

Active funds with a Certified Financial Planner's guidance can outperform.

Regular funds through an advisor ensure tailored advice and discipline.

Insurance Versus Investment
Dual-purpose policies often underperform as pure investments.

Standalone insurance offers better coverage at a lower premium.

Mutual funds provide transparency, liquidity, and targeted growth.

Tax Implications
The maturity payout is tax-free if premiums are below 10% of the sum assured.

Keeping the policy active beyond 2025 avoids tax on continued bonuses.

Evaluate the tax efficiency against returns from other instruments.

Recommendations
For Policyholders Like You
Continue with the policy until 2025 for the full maturity benefit.

Post-2025, decide based on returns and financial needs.

Consult a Certified Financial Planner for optimizing maturity usage.

If Considering Policy Surrender
Reinvest surrendered funds in diversified mutual funds.

Seek active management for consistent, tax-efficient growth.

Final Insights
Your policy secures lifelong coverage and a guaranteed payout in 2025.

Retaining the policy beyond 2025 can maximize accumulated benefits.

Reinvesting in well-managed mutual funds may deliver superior growth.

Ensure alignment with your long-term financial goals and family security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

Latest Questions
Nayagam P

Nayagam P P  |4331 Answers  |Ask -

Career Counsellor - Answered on Mar 15, 2025

Asked by Anonymous - Mar 14, 2025Hindi
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My daughter scored 93.84 percentile in jee mains 1st session in obc quota is there any chances to get any iit seat for her
Ans: Here is, How to Predict Your Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide

Once the January JEE Main session results was declared, many students and JEE applicants started asking common questions about eligibility for specific institutes (NITs, IIITs, GFTIs, etc.) based on their percentile, category, preferred branch, and home state.

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Admission Chances Using JoSAA Data
Step 1: Collect Your Key Details
Before starting, note down the following details:

Your JEE Main percentile (Convert your percentile into All India Rank with the help of a formula available in Google).
Your category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Preferred institute types (NIT, IIIT, GFTI)
Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Your Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.
Follow this approach for Other State candidates Option also and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, and preparation strategies, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your admissions!

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Prof Suvasish

Prof Suvasish Mukhopadhyay  |512 Answers  |Ask -

Career Counsellor - Answered on Mar 15, 2025

Asked by Anonymous - Mar 14, 2025Hindi
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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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