Bajaj Allianz iGain II Policy: Charges Investors should be aware of: Finance Trading Times

Bajaj Allianz iGain II Policy: Charges Investors should be aware of

This is part III of Bajaj Allianz iGain II Policy Review. Please read Part II Bajaj Allianz iGain II Policy: Returns and Investments
The claim is that this policy can only be bought online, so no agent or other party is involved to pay any charges. However, there are charges to this policy and they are not so small to be ignored. The investors should be aware of that.

Second thing that is claimed is that you can manage your investment online and there are no charges if you switch. But there are fund management charges which are as follows:
Fund - Fund Management Charge per annum
Equity Growth Fund II - 1.35%
Accelerator Mid Cap Fund II - 1.35%
Pure Stock Fund - 1.35%
Asset Allocation Fund - 1.25%
Equity Index Fund II - 1.25%
Liquid Fund - 0.95%
Bond Fund - 0.95%

So even though the switching of funds is free of cost, you will have to pay charges as per the fund of your choice (or your fund manager's choice, if you ask them to invest for you).

There are some additional benefits claimed by the Policy - like From the 11th year onwards, iGain II increases the allocation of units by 2% to enhance your investments. So while you pay a 100% premium, 102% of it is invested. However, to get this benefit, you need to remain invested for atleast 11 long years.
Also, you will need to pay them charges for the first year which are as follows for your annual premium amount :
8,000 - 24,999 - 5%
25,000 – 199,999 - 2%
200,000 and above - NIL

And then there are no charges from year 2 onwards. But, there are so called "Policy Adminsitration Charges" of 4.5% of first year Annualized Premium per annum. And these will keep inflating at 5% per annum on every policy anniversary. So you longer you stay, the more charges you pay.
This is what is worriesome - because it is claimed that there are no agents involved, no other parties, its a direct buy from the company. This claim may give an impression that the charges are less, but it is not true.
Add to that the fund management charges stated above. Then there are "Miscellaneous Charge" which are Rs. 100/- per transaction in respect of reinstatement, increase or decrease in regular premium, alteration of premium mode or issuance of copy of policy document.
There are "Mortality Charge" which are dependent on the age of the person - the older you are, the higher the mortality charge you pay.
So overall, a typical ULIP, with loads and loads of charges although it is claimed to be a "Direct Buy" "Online Buy Only" with no agents or no third party. Investors need to be careful about these nos. Continue Reading about Surrender Charges the overall feedback about Bajaj Allianz iGain II Policy
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