ULIP (Unit Linked Insurance Plan)

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Best Ulip Insurance Policy For You
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• What is ULIP?
• A ULIP or unit linked insurance plan is a market
  linked product that combines the best of
  insurance and investment. It is a plan which is
  linked to the capital market and offers
  flexibility to invest in equity or debt funds as
  per risk appetite. This dual benefit along with
  flexibilities provided by ULIPs make them an
  attractive investment avenue.

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• In 2010, IRDA capped annualized charges of ULIPs
  at 2.25 for the first 10 years of policy term.
  At present, many insurance companies have reduced
  commissions and other charges, and as a result,
  some of the ULIPs launched in recent years are
  cheaper than mutual funds.
• 7 Reasons Why ULIPs are Good Choice
• Being insurance cum investment plan, Best Ulip
  Insurance Policy is one of the most lucrative
  options to invest in. Your premium money is
  invested in stock markets that generates
  substantial returns as well as provides you a
  risk cover during the policy term.
• ULIPs are known amongst various investment
  options due to following benefits
• Complete transparency in structure, charges and
  features
• Flexibility to switch between funds
• In cover option
• Different premium paying frequencies
• Various fund options to suit both risk takers and
  averters

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• Additional covers can be taken by opting for
  riders
• Dual tax benefits available under sections 80C,
  80Dand 10 (10 D)
• Types of ULIP Plans
• ULIPs are best classified on the basis of purpose
  they serve.
• ULIP for Retirement - In this plan, you pay
  premium during your employment tenure. It gets
  accumulated in a corpus amount, which is paid in
  the form of annuities to a policyholder after
  retirement.
• ULIP for Wealth Creation - This plan's objective
  is to multiply wealth over a period of time. Such
  plans are recommended for people who are in late
  twenties and early thirties and by investing in
  this plan they get flexibility to fund their any
  future financial goal.
• ULIP for Children Education As a parent you
  want to ensure that your childs overall
  education doesnt get hampered due to unforeseen
  circumstances. There are various ULIP plans that
  offer money at key milestones of your kids
  education and thus, ensure that any unforeseen
  circumstance doesnt hinder their development.
• ULIP for Health Benefits - Apart from regular
  benefits, ULIP provides financial assistance to
  meet medical contingencies.

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• ULIP Charges
• The charges related to unit linked insurance plan
  ULIPs are segregated into various sub classes.
  The key ones, you should know about are as
  follows
• Premium Allocation Charges - These charges are
  levied upfront on the premium paid by the
  investor. These are the initial expenses incurred
  by a company in issuing the policy, like medical
  expenses and underwriting cost.

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• Policy Administrative Charges - These charges are
  deducted on a regular basis to recover expenses
  incurred by insurer on servicing and maintaining
  a life insurance policy.
• Surrender Charges - Surrender charges may be
  deducted for premature partial or full encashment
  of units wherever applicable, as mentioned in the
  policy conditions. These charges are levied as a
  percentage of the fund value or as a percentage
  of the premium.
• Mortality Charges - These are charges incurred by
  a life insurance company towards providing a life
  cover to an individual and they vary with the age
  and sum assured of the policy. These charges are
  deducted on a monthly basis.
• Fund Management Charges - ULIP funds are invested
  in debt and equity instruments. These charges are
  incurred towards managing the fund and vary from
  plan to plan and fund to fund. This fee is
  deducted before computing the net asset value or
  NAV.

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• Fund Switching Charge - ULIPs not only allow you
  to invest your money in fund options with various
  debts - equity exposure but also give you an
  option to switch between different funds for
  which your insurance company will charge
  switching fee. Most of the policies provide few
  free switches every year.
• Discontinuance charge - When an investor
  discontinues a plan prematurely within lock-in
  period (5 years currently), insurance provider
  charges a small fee for the same. This is preset
  by IRDA and hence common for all policies.

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