The product does not qualify for tax benefits and the life cover is too low HDFC Life Insurance's Invest Wise Plan

PRODUCT FEATURES: It is a single premium unitlinked insurance policy (Ulip) with a fixed tenure of 15 years. The minimum premium is Rs 25,000, while there is no limit on the maximum premium.

The entry age is 45 to 70 years and the maximum policy maturity age is 85 years. If you do not want to go for medicals, you are given the option of answering a short medical questionnaire (SMQ). There are five non-guaranteed funds to choose from depending on your risk appetite.

WITHDRAWALS: The product allows lump sum partial withdrawals from your funds after five years from date of premium payment. The partial withdrawal amount should be at least Rs 10,000, while the maximum amount can be 50 per cent of the single premium throughout the policy term.

LIFE COVER: The sum assured will be 1.1 times the single premium. That means if your premium is Rs 1,00,000, then your life cover will be Rs 1,10,000.

DEATH AND MATURITY BENEFITS: The death benefit is divided into two parts. In case a policyholder dies before 60 years of age, then whichever amount is greater of the total fund value or the sum assured minus the withdrawals during the past two years is paid out.

For death benefit on or after 60 years, whichever amount is greater than the total fund value or the sum assured (minus the withdrawal made after attaining age 58 years) is paid. On maturity, the fund value is paid to the policyholder as maturity benefit.

CHARGES: The premium allocation charge is 2.5 per cent for premium of Rs 25 000 up to Rs 10,00,000 and 1.5 per cent for premium paid above Rs 10,00,000.

The fund management charge is 1.35 per cent of the fund value, the policy administration charge is 0.05 per cent to 0.17 per cent of the premium paid and miscellaneous charge is Rs 250 per request.

Firstly, the product does not qualify for tax benefits. So, even if the product gives you very high return, these will be fully taxable depending on your tax slab. Secondly, the life cover is too low. Mutual funds will provide you better tax efficiency and also score on costs factor. For a financial goal that has to be met in 15 years, you can consider diversifying your money into best performing equity mutual funds and a part in public provident fund (PPF). When you approach the goal, shift the money in debt fund to avoid risk.

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