Life Insurance
 
ULIP
 

ULIPs

Unit Linked Insurance Policies or ULIPs as they are commonly called, are more innovative forms of life insurance that also offer returns on your investments. Every ULIP provides cover against death. In addition, these unit linked insurance plans also serve as great means of long-term savings, structured to give you miximum benefit. In simple words, investment in ulips is great combination of protection and investment.

Let us help you understand ULIPs better.

 

When you buy ULIPs, every year from the premium your life insurance company deducts the charges towards life cover, administration and fund management. The balance ULIP premium is invested in various funds offered by the insurance company.


Every unit linked insurance plan holder is allotted a set number of units based on the ULIP investment. On a daily basis, life insurance companies declare a Net Asset Value, also known as NAV or ULIP NAV. This is your unit's worth in the market on that given day. You can monitor and modify your ULIP investments in various fund options and make the most of your hard earned money.

Most unit linked policy holders opt for ULIPs because of the flexibility they offer. There is an option of making lumpsum investment or paying regular premiums using the systematic investment plans (SIP). And just like any other life insurance policy, with ULIPs also you can choose from annual, half-yearly, quarterly or monthly ULIP premium payment options to suit your financial requirements.


Additionally, as a unit linked policy holder, you have the option of investing your units across various fund options such as equity fund, balanced fund, debt fund and secure fund. During the tenure of your policy depending on your risk appetite you can also switch investments from one fund to another. This gives you the flexibiltiy of customising your investment plan.


Most importantly, ULIP investors have the added ability to invest additional lumpsum amount anytime during the policy term.Or if you should need more liquid cash at some point of time, you can even partially withdraw from the fund value at that time.

One of the other common reason for the success of unit linked insurance plans is that all ULIP investments qualify for tax deductions under Section 80C of the Income Tax Act. Irrespective of your plan and fund options you can enjoy these tax redemption benefits.
However, once you have decided to invest in ULIPs, you will realise that it has many unique benefits which a good investment plans should have.

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