What is ULIP?

Posted by krishnas in Insurance 16 Comment

Introduction
In this article I will be writing about the ULIP insurance plan. In our previous articles we have learn about the term insurance or life insurance plans and the endowment insurance plans. ULIP is the one kind of insurance plans which is linked to the investment options. Many people prefer to invest on the ULIP plans because it yields better return. I will explore the advantages of the ULIP insurance plans in details. If you like the article please subscribe to our future articles here.

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What is ULIP?
!"IP stands for Unit Lin'ed Insurance Plans. #s we know that insurance is for protecting our life from the any uncertain events like death or accident. $he purpose of the normal insurance plan is %ust protecting the life but not ensuring any savings for the future. $he example for the pure insurance plans are term insurance. Many people wanted plan which gives protection also gives the returns for their investment. &o insurance companies come up with the ULIP plan where the premium amount is invested in the stock market and returns better income on the maturity period.

What is the difference between ULIP and (utual )unds?

In structure both ULIP and Mutual 'unds looks similar. (ut in ob%ective they are different. (ecause of the high first)year charges mutual funds are a better option if you have a five)

year hori*on. (ut if you have a hori*on of 1+ years or more then ULIPs have an edge. $o explain this further a ULIP has high first)year charges towards ac,uisition -including agents. commissions/. #s a result they find it difficult to outperform mutual funds in the first five years. (ut in the long)term ULIP managers have several advantages over mutual fund managers. &ince policyholder premiums come at regular intervals investments can be planned out more evenly. Mutual fund managers cannot take a similar long)term view because they have bulk investors who can move money in and out of schemes at short notice. )rom *ctober +,,-. IRDA has set the ma/imum fees amount to be levied a&ainst the ULIP #olicies0 Which ma'es the ULIP more com#ete a&ainst the mutual funds0

"onsider the followin& #oints before choosin& the ULIP Polic$

$alk to the agent for more details about the policy. If he guarantee.s any return after 01. years then you should be careful. 2eep in mind that your money is invested in the market. $he returns are purely depends on the market performance. (uy the policy with minimum of 1+ years. In the long term ULIP policies give very good returns. If possible try to analy*e the market condition before staring the investment. "earn the fundamentals of ULIP policies. 3on.t buy the ULIP %ust for the tax savings purpose. Compare the different ULIP policies in the market.

Summar$
In this article I have explained about the ULIP plan and the purpose of the ULIP. In my next article I will be writing about the different ULIP plans and how to choose the better plans amount the many players in the market. $hank you for reading this article44

Unit Linked Insurance Plans

Market linked insurance plans invest the premium in to the equity, debt and cash markets by the way of allocating units, which like any other mutual fund have a N ! and the customer is free to switch between one fund class to another depending on the risk factor he wishes to be in" ULIPs offer a better return than the traditional endowment plans and offer a great deal of fle#ibility along with great returns making them the finest product offering" $e at %a&a& llian' Life Insurance have developed a number of ULIP products which range from single premium to a regular premium option along with investment funds ranging from inde# funds to mid(cap funds and debt market linked funds"

dvantage Insurance Plan

Make your returns soar as possible by pushing your investments upwards, with %a&a& llian' Ma# dvantage Insurance Plan" )his e#citing new ULIP product gives you the guarantee to encash your units at maturity, at the highest unit price achieved by the fund over the *+(year term of your policy" , -onditions apply" %a&a& llian' Ma# dvantage Insurance Plan makes sure that once your returns go up, they stay up" .o invest today to gain the ma#imum advantage and jiyo befikar.

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Key Highlights:
)he plan offers you key benefits of/

Investment in Ma# 0ain 1und II guarantees highest unit price based on the highest N ! for policy tenure of *+ years" , -onditions apply" 2efund of 3+4 of total regular premium allocation charge as 0uaranteed ddition at maturity" 5ption to select6 change premium payment term from 7 to 8 years" 1le#ibility to pay unlimited top(up premium,, and make partial withdrawals" ,, -onditions apply" 5ption to choose from 7 investment funds to invest" Unlimited free switches" ,,, -ondition pply ,)he ob&ective of the Ma# 0ain 1und II is to provide a participation in the upside of the equity market while guaranteeing the highest unit price recorded during the policy term at maturity" )he renewal premium and the top(up premium can be invested in the Ma# 0ain 1und II provided the fund has been chosen at inception as per the chosen premium apportionment rate" ny redemption of units before the maturity date shall be encashed at the prevailing unit price" ,, )o know more about )op(Up premium 9 partial withdrawals please read sales brochure" ,,, .witching in to Ma# 0ain 1und II is not allowed" :owever switching out of Ma# 0ain 1und II is allowed anytime after the 7th policy year"

ssured Protection Insurance Plan

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$ith %a&a& llian' ssured Protection Insurance Plan we have formulated a unique combination of protection and prospects of attractive returns with investments in various mi# of assets to make a perfect plan to last you a lifetime of prosperity and happiness"

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Key Highlights:
)he plan offers you key :ighlights/(

term"

0et *++4 allocation from the *+th policy year" <#tra protection with wider accidental cover" utomatic annual increase in sum assured from 3th policy anniversary" 5ption to select policy term of *+, *7 or =+ years and premium paying term from 8 years to policy -hoice of 8 investment funds to invest in" -hoose between Investor .electable portfolio strategy and wheel of life portfolio strategy" 0et ma#imum fle#ibility to pay top(up premium and partial withdrawal any time after 7th policy year"

.ingle Premium Unit Linked Insurance Plans >ULIPs?

Unit Linked .ingle Premium Plans require the premium to be paid only once" Single Premium ULIPs by Bajaj Allian are:!

$ealth Insurance Plan .hield Insurance Plan

$ealth Insurance Plan

%a&a& llian' $ealth Insurance Plan is a hassle(free way of investing your money and at the same time taking care of your insurance needs" )he plan gives you the benefits of paying a single premium, so you don@t have to worry about

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due dates, repetitive paperwork and renewals or constantly make phone calls to your financial advisor" part from this, the high allocation offered by the plan allows you to meet your financial goals" $ealth Insurance Plan provides you the option to decrease your sum assured" .ystematic switching option to manange your investments better and optional rider benefits to enhance your protection are also some features of $ealth Insurance Plan" .o invest today and &iyo befikar",-onditions pply"

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Key Highlights
$ealth Insurance Plan offers the following key benefits/(

pply"

Loyalty addition up to 84 of single premium at the end of the fifth year" ,,-onditions pply" 5ption to receive the maturity benefits as settlement option" Ma#imum fle#ibility to pay unlimited top(up premium and make partial withdrawals" ,,,-onditions 5ption to decrease your sum assured" .ystematic switching option to manage your investments better" 5ptional additional rider benefits to enhance your protection" "o#
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,)he allocation rate is AB4 for .ingle premium and )op up Premium" , ,If policy has not been terminated at the end of the 7th policy year the company will allocate loyalty addition at the then prevailing unit price of an amount equivalent to C"++4 for .ingle Premium of 2s" 7++++ to AAAAA, 7"++4 for single premium of 2s" *++,+++ to =DA,AAA and 8"++4 for single premium of 2s" =7+,+++ and above" No loyalty addition is payable on any top(up premium paid"

.hield Insurance Plan

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%a&a& llian' .hield Insurance Plan, a single premium fi#ed(term unit(linked insurance plan gives you the choice of investment options to achieve your desired ob&ective at maturity" )his plan also gives you guaranteed unit price at maturity with .hield Plus 1und III" %a&a& llian' .hield Insurance Plan is a simple to understand fi#ed(term unit(linked life insurance plan" .ingle premiums 9 any top(up premium paid by you, net of premium allocation charge is invested in the fund>s? of your choice and units are allocated depending on the unit price of the fund>s?" )he value of your policy is the total value of units that you hold in the fund" )he mortality charge, the policy administration charge and the rider premium charge>s? >if any? are deducted monthly through cancellation of units" 1und Management -harge is ad&usted in the unit price" .o planning for a target amount is made easy nowE , -onditions apply Download Brochure in 2egional Languages

Key Highlights:
%a&a& llian' .hield Insurance Plan provides you with the following/

.ingle premium plan with fi#ed term of *+ years .um ssured of *"*6*"=7 to 7 times of the .ingle Premium -hoice of A funds for investment, including new C funds ( .hield Plus 1und III, 0rowth Plus 1und III and %luechip <quity 1und 0uaranteed ddition via 2eturn of up to 3 4 of the .ingle Premium at maturity ,, -onditions apply .hield Plus 1und III offers you guarantee of minimum unit price at maturity" , -onditions apply Ma#imum fle#ibility through ( (5ption to decrease sum assured (Unlimited top(up premium payment (Partial withdrawals anytime after five years from the commencement of the policy (Unlimited free switches (5ptional riders to enhance your protection , )he unit price at maturity >in *+ years time? is guaranteed to be a minimum of *8+4 of unit price as on date of allocation of units under a policy" .witching into .hield Plus 1und III would not be allowed at any time during the term of the policy, where as switching out would be possible at any time" .witching out of .hield Plus 1und III would be at the prevailing unit price and not at any guaranteed unit price ,, )he 0uaranteed ddition as a percentage of the single premium i"e" 3"++4 for .ingle Premium of 2s" =7,+++ to C++,+++ and C"++4 for single premium of 2s" C++,++* 9 above will be paid at maturity" No 0uaranteed ddition is payable on any )op up premium paid"