A Unit Linked Insurance Plan or ULIP, is a financial product that is acts both a an investment as well as insurance.
It is one of the best investment options in India and is more reliable when it comes to wealth creation as it invests in debt and equities markets with the fluctuation is counted by the net asset value (NAV).
In such a plan the premium amount, after deduction of charges, is invested into funds of your choice and the fund could be equity based, debt based etc.
The performance of the fund depend on the market although you can switch between the funds.
They are similar to those of mutual funds except that unit linked insurance plans are investment products that comes with insurance benefits.
It can be viewed as a long term investment plan, which provides risk cover for the policy holder along with investment options to invest in any number of qualified investments such as stocks, bonds or mutual funds.
You pay the premium just like for an insurance policy unlike the insurance policy the premium is not just for insurance but also for investment.
After deducting some charges some in beginning, some during the policy term and for insurance ,the amount left gets invested into mutual fund of your choice. have different funds with different risk-return profile.
One may have an allocation of 80-20 to equity and debt ratio and you can switch between the funds 4 free switches in most of the cases , there after some nominal fees.
These charges are deducted from the premium paid by the client and they account for the initial expenses incurred by the company in issuing the policy.
These charges are deducted on a monthly basis to recover the expenses incurred by the insurer on servicing and maintaining the life insurance policy like paperwork and it could be throughout the policy term or vary at a pre determined rate.
A part of the premium from the selected fund , is invested either in equities or debt, bonds, money market instruments etc or a combination of these and managing these investments incurs a fund management charge (FMC).
The FMC varies from fund to fund even within the same insurance company depending on the assets, a fund with higher equity component will have a higher FMC.
These charges are deducted for managing the funds before arriving at the Net Asset Value (NAV) and the fee is charged as a percentage of funds under management.
Mortality expenses are charged for providing a life cover to the individual and are deducted on a monthly basis.
The expenses vary with the age and either the sum assured or the sum at risk which is the difference between sum assured and fund value of the insurance policy of an individual.
It is done by including your age, mortality tables used by the industry and also the company’s claim experience though the mortality charges should be the same, some insurers levy differential rates.
These charges are deducted for premature withdrawal partial or full with guidelines on the maximum surrender charges that can be levied by life companies.
The charges when you switch between funds ex from Equity to debt with a limited number of switches typically 4 are allowed without any charge.
In ULIP which offer minimum guaranteed amount or NAV, there is cost of guarantee which is deducted from the total units.
There are online plans with no charges for premium allocation, policy administration and discontinuance except a percentage of fund management charge per annum and mortality charge from the fund value of customer in order to provide the life cover.
This makes them lower in terms of cost than equity mutual funds and make them attractive with the tax efficient transfer from debt to equity, and vice versa.
The mortality charges go down as the fund value goes up and in case of death in the initial years of the policy, when the fund value is less than the sum assured, the insurer will pay the agreed sum to the nominee.
When the time the fund’s value goes higher than the sum assured, the death benefit will be the accumulated amount in the fund.
The mortality charge keeps reducing year after year as the sum at risk reduces which is the difference between the accumulated fund value and sum assured under the policy.
There are many nit-linked insurance products to suit your goals for your retirement planning, for your health and marriage or for investment purposes.
Child plans are for securing child’s financial future as the money is invested to ensure that the child’s future financial goals like education are secured. Along with it, death benefit in most child plan is very comprehensive so that child’s future is not compromised.
Pension plans focus on the creating of a corpus amount so that the life insured gets regular pension after retirement.
It is one of the best investment options in India and is more reliable when it comes to wealth creation as it invests in debt and equities markets with the fluctuation is counted by the net asset value (NAV).
In such a plan the premium amount, after deduction of charges, is invested into funds of your choice and the fund could be equity based, debt based etc.
The performance of the fund depend on the market although you can switch between the funds.
They are similar to those of mutual funds except that unit linked insurance plans are investment products that comes with insurance benefits.
It can be viewed as a long term investment plan, which provides risk cover for the policy holder along with investment options to invest in any number of qualified investments such as stocks, bonds or mutual funds.
You pay the premium just like for an insurance policy unlike the insurance policy the premium is not just for insurance but also for investment.
After deducting some charges some in beginning, some during the policy term and for insurance ,the amount left gets invested into mutual fund of your choice. have different funds with different risk-return profile.
One may have an allocation of 80-20 to equity and debt ratio and you can switch between the funds 4 free switches in most of the cases , there after some nominal fees.
These charges are deducted from the premium paid by the client and they account for the initial expenses incurred by the company in issuing the policy.
These charges are deducted on a monthly basis to recover the expenses incurred by the insurer on servicing and maintaining the life insurance policy like paperwork and it could be throughout the policy term or vary at a pre determined rate.
A part of the premium from the selected fund , is invested either in equities or debt, bonds, money market instruments etc or a combination of these and managing these investments incurs a fund management charge (FMC).
The FMC varies from fund to fund even within the same insurance company depending on the assets, a fund with higher equity component will have a higher FMC.
These charges are deducted for managing the funds before arriving at the Net Asset Value (NAV) and the fee is charged as a percentage of funds under management.
Mortality expenses are charged for providing a life cover to the individual and are deducted on a monthly basis.
The expenses vary with the age and either the sum assured or the sum at risk which is the difference between sum assured and fund value of the insurance policy of an individual.
It is done by including your age, mortality tables used by the industry and also the company’s claim experience though the mortality charges should be the same, some insurers levy differential rates.
These charges are deducted for premature withdrawal partial or full with guidelines on the maximum surrender charges that can be levied by life companies.
The charges when you switch between funds ex from Equity to debt with a limited number of switches typically 4 are allowed without any charge.
In ULIP which offer minimum guaranteed amount or NAV, there is cost of guarantee which is deducted from the total units.
There are online plans with no charges for premium allocation, policy administration and discontinuance except a percentage of fund management charge per annum and mortality charge from the fund value of customer in order to provide the life cover.
This makes them lower in terms of cost than equity mutual funds and make them attractive with the tax efficient transfer from debt to equity, and vice versa.
The mortality charges go down as the fund value goes up and in case of death in the initial years of the policy, when the fund value is less than the sum assured, the insurer will pay the agreed sum to the nominee.
When the time the fund’s value goes higher than the sum assured, the death benefit will be the accumulated amount in the fund.
The mortality charge keeps reducing year after year as the sum at risk reduces which is the difference between the accumulated fund value and sum assured under the policy.
There are many nit-linked insurance products to suit your goals for your retirement planning, for your health and marriage or for investment purposes.
Child plans are for securing child’s financial future as the money is invested to ensure that the child’s future financial goals like education are secured. Along with it, death benefit in most child plan is very comprehensive so that child’s future is not compromised.
Pension plans focus on the creating of a corpus amount so that the life insured gets regular pension after retirement.
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