| Dynamic Comparison Tool | |||||||||||
| MUTUAL FUND BUSINESS vs. INSURANCE BUSINESS … A COMPARISON | |||||||||||
| Insurance Premium and Mutual Fund SIP Amount | Rs. | 1,00,000 | Yearly | ||||||||
| Commission Structure … Insurance | |||||||||||
| Insurance | Mutual Funds | ||||||||||
| Year 1 | 30% | Upfront | 2.00% | 1st year | |||||||
| Year 2 | 15% | Trail | 0.65% | 2nd yr on… | |||||||
| Year 3 on … | 5% | ||||||||||
| Growth in AUM for Mutual Fund Investments … | 15.00% | ||||||||||
| Results | |||||||||||
| Total Business Done by the Agent/Distributor | 25,00,000 | In 25 years | |||||||||
| Total Earnings in Insurance | 1,60,000 | ||||||||||
| Total Earnings in Mutual Funds | 9,99,732 | ||||||||||
| Times MF Earnings to Insurance Earnings | 6.25 | ||||||||||
| Year End | INSURANCE - 1 Sale | MUTUAL FUNDS - 1 Planning Assuming business from day 1 | Growth in AUM | ||||||||
| Premium Rs. | % Comm. | Income Rs. | SIP Amt. | AUM | Up-front Income | Trail Income | Total Income | 15% | 115% | ||
| 1 | 1,00,000 | 30% | 30,000 | 1,00,000 | 1,07,500 | 2,000 | 349 | 2,349 | |||
| 2 | 1,00,000 | 15% | 15,000 | 1,00,000 | 2,31,125 | 2,000 | 1,125 | 3,125 | |||
| 3 | 1,00,000 | 5% | 5,000 | 1,00,000 | 3,73,294 | 2,000 | 1,989 | 3,989 | |||
| 4 | 1,00,000 | 5% | 5,000 | 1,00,000 | 5,36,788 | 2,000 | 2,982 | 4,982 | |||
| 5 | 1,00,000 | 5% | 5,000 | 1,00,000 | 7,24,806 | 2,000 | 4,125 | 6,125 | |||
| 6 | 1,00,000 | 5% | 5,000 | 1,00,000 | 9,41,027 | 2,000 | 5,438 | 7,438 | |||
| 7 | 1,00,000 | 5% | 5,000 | 1,00,000 | 11,89,681 | 2,000 | 6,949 | 8,949 | |||
| 8 | 1,00,000 | 5% | 5,000 | 1,00,000 | 14,75,633 | 2,000 | 8,687 | 10,687 | |||
| 9 | 1,00,000 | 5% | 5,000 | 1,00,000 | 18,04,478 | 2,000 | 10,685 | 12,685 | |||
| 10 | 1,00,000 | 5% | 5,000 | 1,00,000 | 21,82,650 | 2,000 | 12,983 | 14,983 | |||
| 11 | 1,00,000 | 5% | 5,000 | 1,00,000 | 26,17,547 | 2,000 | 15,625 | 17,625 | |||
| 12 | 1,00,000 | 5% | 5,000 | 1,00,000 | 31,17,679 | 2,000 | 18,664 | 20,664 | |||
| 13 | 1,00,000 | 5% | 5,000 | 1,00,000 | 36,92,831 | 2,000 | 22,159 | 24,159 | |||
| 14 | 1,00,000 | 5% | 5,000 | 1,00,000 | 43,54,256 | 2,000 | 26,177 | 28,177 | |||
| 15 | 1,00,000 | 5% | 5,000 | 1,00,000 | 51,14,894 | 2,000 | 30,799 | 32,799 | |||
| 16 | 1,00,000 | 5% | 5,000 | 1,00,000 | 59,89,628 | 2,000 | 36,114 | 38,114 | |||
| 17 | 1,00,000 | 5% | 5,000 | 1,00,000 | 69,95,573 | 2,000 | 42,226 | 44,226 | |||
| 18 | 1,00,000 | 5% | 5,000 | 1,00,000 | 81,52,408 | 2,000 | 49,255 | 51,255 | |||
| 19 | 1,00,000 | 5% | 5,000 | 1,00,000 | 94,82,770 | 2,000 | 57,339 | 59,339 | |||
| 20 | 1,00,000 | 5% | 5,000 | 1,00,000 | 1,10,12,685 | 2,000 | 66,635 | 68,635 | |||
| 21 | 1,00,000 | 5% | 5,000 | 1,00,000 | 1,27,72,088 | 2,000 | 77,325 | 79,325 | |||
| 22 | 1,00,000 | 5% | 5,000 | 1,00,000 | 1,47,95,401 | 2,000 | 89,619 | 91,619 | |||
| 23 | 1,00,000 | 5% | 5,000 | 1,00,000 | 1,71,22,211 | 2,000 | 1,03,757 | 1,05,757 | |||
| 24 | 1,00,000 | 5% | 5,000 | 1,00,000 | 1,97,98,043 | 2,000 | 1,20,015 | 1,22,015 | |||
| 25 | 1,00,000 | 5% | 5,000 | 1,00,000 | 2,28,75,249 | 2,000 | 1,38,713 | 1,40,713 | |||
| TOTAL | 25,00,000 | 1,60,000 | 25,00,000 | 50,000 | 9,49,732 | 9,99,732 | |||||
Thursday, April 7, 2016
MUTUAL FUND BUSINESS vs. INSURANCE BUSINESS … A COMPARISON
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