Aegon iMaximise has an edge over its peers on its online purchase facility. Its exhaustive death cover makes it an attractive one
Launched in December 2010, Aegon Religare iMaximise is an online unit-linked insurance plan (Ulip). It is a low-cost product as buying online is more cost efficient due to absence of agents. iMaximise has an exhaustive death cover and a dual-investment strategy ? trigger portfolio and self-managed option ? for the policyholder. To make investing simple, Aegon has provided only three funds for policyholders to invest the premium amounts.
Unlike other schemes, which charge a hefty premium allocation in the initial years, iMaximise does not charge any allocation cost. Additional premium paid towards investment purposes only (top -ups) are also not charged. Other charges are also lower as compared to its peer, Bajaj Allianz iGain, or other similar schemes in the market.
Despite the fact that the policy does not have any premium allocation charge, investors are allotted additional units every year from the 12th policy year onwards. The scheme also offers premium to the beneficiary every policy year, following the death of the policyholder, till the end of the policy term.
iMaximise offers two investment strategies. One is the Self Managed Portfolio strategy where the onus of managing the portfolio is on the policyholder. The other one is the Trigger Portfolio strategy in which the growth of the fund is protected as premiums paid are invested in the Accelerator Fund. As soon as the fund value under the Accelerator Fund swells to more than 110%, the excess amount is transferred to a Secure Fund. Trigger Portfolio strategy is worth investing but it will be better when the fund it invests starts to perform. Accelerator Fund, since its inception, has generated negative returns of 4.4% in line with the Nifty. The stable fund, which is a balanced fund has also failed to outperform its benchmark. Secure Fund is the only one in the product investment basket that has generated good returns vis-a-vis its benchmark.
Aegon Reliage iMaximise equity portolio has been bullish on the financial sector for quite some time now as a majority of its older holdings belong to this sector. Interestingly, unlike most other insurance companies, Aegon has a relatively low exposure to the energy and IT sectors.
As far as stocks are concerned, fund manager seems to limit his universe to Nifty scrips as more than 70% of the asset under management is invested in them. A few sectors such as metals are completely missing from this portfolio. Although the absence of such high beta sectors helps keep the risk quotient of the portfolio low.
Upon maturity, the policyholder receives the amount accumulated in the fund whereas in the case of death, the beneficiary either gets higher of the sum assured of 105% of the fund value or regular annualised premium every year from the date of death of the policyholder till the end of the policy term along with a higher of the sum assured of 105% of the fund value.
Take, for instance, a 35-year-old person invests 30,000 per annum in the Trigger Portfolio strategy for 15 years. Assuming the sum assured equivalent to 10 times the annual premium, the total sum assured receivable, in case of any eventuality, would be 3 lakh.
At the end of 20 years, assuming the rate of return of 10%, the fund value on maturity will be 15.9 lakh. In case of death of the policyholder in the 15th year, the nominee will receive almost 9 lakh along with 30,000 annually for the next five years.
Aegon iMaximise has a competent edge over its peers due to the online purchase facility. The exhaustive death cover makes the scheme very attractive for individuals looking for insurance rather than investment. The Trigger Portfolio strategy is a good option for investment as it safeguards income and keeps the principal only at risk. However, a disappointment is the performance of the funds.
It would be better to invest only in Secure Fund and consider it as an insurance plan as it may not give high returns, but will provide a good cover for life.