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I recently had the privilege of speaking with Mr. Yadgiri, the Deputy Director at TATA AIA Life Insurance. With a remarkable 20-year career in the insurance industry, including a decade at TATA AIA, Mr. Yadgiri shared his insights into an exciting new market-linked wealth creation product designed for insurance investors.

This innovative product stands out for its short premium-paying term of just five years, providing a unique opportunity for investors seeking both discipline and flexibility in their investment strategy. Mr. Yadgiri emphasized that this is the first plan of its kind being strategically offered to clients at TATA AIA.

One of the significant advantages of this new product is its innovative commission structure. Unlike traditional market-linked plans where first-year commissions for agents are typically high, this product aligns agent commissions with those of mutual fund distributors. Agents receive a 1% trail commission of the assets under management (AUM), addressing past complaints about transparency in fund utilization within Unit Linked Insurance Plans (ULIPs). This ensures more of the investor's money is directed into the investment rather than being consumed by agent commissions or other charges.

The product also boasts an expense ratio similar to that of mutual funds, around 1.45% per annum on the premium. This competitive rate further enhances its appeal by ensuring that more funds are allocated towards wealth creation rather than administrative costs.

Mr. Yadgiri highlighted the product's strategic approach to investor discipline. While many mutual fund investors start with long-term plans but often withdraw prematurely due to various commitments, this product mandates a five-year premium payment term, encouraging investors to maintain their contributions and benefit from potential long-term growth.

For investments, TATA AIA offers two distinct products based on the premium amount. If the annual premium is less than ₹2.5 lakhs, investors can opt for the Fortune Pro plan. For those investing above ₹2.5 lakhs per annum, the Wealth Pro product is available. Both products come with a plethora of fund options similar to those found in mutual funds, catering to diverse investor preferences.

Additionally, investors can change their fund selection up to 12 times a year without any charges, providing flexibility to adapt their investment strategy as market conditions evolve. Despite its market-linked nature, the plan still offers tax benefits, making it a comprehensive and attractive option for disciplined investors.

I had an amazing knowledge transfer session with Mr. Yadgiri and I would highly recommend these products for investors looking to instill discipline in their investing habits.