ULIP Review: ING Market Shield

Product Details

ING Market Shield is a Type I unit-liked insurance plan that offers highest net asset value (NAV) guarantee on a daily basis over seven years. However, unlike other guaranteed schemes Market Shield guarantees only 80% of the highest NAV. So, if the net asset value of the plan increases from 10 to 20, the guaranteed NAV will only be 16. ING Life offers just one investment option to investors under the scheme, the guaranteed NAV fund.

Unique Feature

Market Shield offers guaranteed NAV on surrender or demise of the policyholder. Others pay just the accumulated fund value in these situations. It is an open ended scheme which allows investors to invest in it any time. They do not need to wait for the series to recommence. The scheme has a tenure of 15-20 years compared to a maximum of 10 years for its peers.

For Existing Customers

Those already invested in the plan should remain invested. The fund is likely do well in the long term due to its higher exposure to equities. However, considering the capital market cycle one should shorten the policy tenure to 7-10 years. You may add term insurance if your life cover is not adequate.

For Those Looking to Invest

For those interested in ING Market Shield, it's a good time to invest in the plan as you will get a unit at 9.72with 8.1 as the guaranteed return. However, one should bear in mind that the cost structure of the scheme is high. Investors with a high risk-return appetite may skip this scheme as most of the investment is in debt.

Our View

ING Market Shield is unique in the D category of guaranteed NAV plans. Its offer of benefit of guarantee on death, surrender and partial withdrawal makes the product beat most other scheme as they offer guarantee only on maturity. However, a volatile market has impacted the fund's performance. The returns have fallen by 2.3% taking the NAV to 9.77, below the base NAV of 10. Currently, the guaranteed return stands at 8.1 per unit only due to its 80% cap. At 100% guarantee, the return would have been 10.13 per unit.

 

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