Achieve the objectives of tax saving, risk cover, liquidity and most of all higher tax free returns

This is a reproduction of letter to one of the policy holder aged 28 years for you to get an idea of how the Unit Link Policies practically work for achieving the objectives of tax saving, risk cover, liquidity and most of all higher tax free returns... You may compare these with any other instrument that you may be having... Please come forward for further queries that you may have.

Ref.Your Policy No.xxxxxx... 0f 04/05/06 under Unit Linked Endowment Plan with life risk cover of INR 5.00 Lacs along with accident rider, half yearly premium payable is INR 12500/-

Dear Policy Holder,

I am pleased that you decided to go for this policy. You have had an annualised return of over 25% p.a.on your funds invested (precharges) so far and the next premium falls due on 04/05/07.You presently hold 257 Units under Balanced Fund and 362 Units under defensive Fund.

Your policy allows you to pay extra premiums called top ups and these funds would also gain in the same fashion as explained earlier also qualifying for tax saving under section 80 CC , all without attracting tax on returns as well . You should however make sure that the top up amount together with annual premium does not exceed 20% of the risk cover in a year in accordance with the provision under section 10(10)D which says that the returns will not attract tax if the total premium paid in a year is up to 20% of the risk cover.

In light of above, I suggest that you must pay in extra some of up to INR 75000/- until 31 March 07 in accordance with availability of funds in your hands. As your policy allows you to withdraw moneys once or more times without restriction, you would not face liquidity problem. Further more your funds are invested to the extent of 99% as against mutual fund investment attracting entry load of 2.5% or more. You are further advantaged because of the switching option without cost or delay, twenty four times in a year. Discretely used, this facility may raise your returns handsomely during the year as well as in the long run. My clients have been able to get up to 60% returns during last one year.

For your information, a risk cover charge roughly @ Rs 16/- per Lac per month is being deducted presently.

I call upon you to consider buying more such policies, as your income grows, for your self and for the members in your family as nothing else is so complete and so rewarding a financial instrument in our country presently. It takes care of all your needs in short run as well as in long run with the life risk cover and tax shelter and perfect liquidity. You would be glad to know that HDFC SLIC has been out beating the index by over 10% p.a .HDFC SLIC has been rated as best fund manager amongst the industry players.

I would be glad to provide further clarifications required.

Wish you a very Happy New Year.

Hari Om

p.s. Kindly visit www.panchtattvainsurance.blogspot.com regularly for guidance regarding switching time and strategy.

Krishna Kumar Khandelwal
Certified Financial Consultant: HDFC SLIC