Since most of us have heard about Unit Linked Insurance Plan (ULIP).
Let me brief you on what ULIP is exactly all about:
ULIP is a life insurance product which fulfills both insurance and investment needs.
ULIP provides a choice where one can invest in different types of funds ranging from debt to equity.
ULIPs generally have 4 different types of charges and these charges are deducted from your insurance premium and balance is invested. The four charges are Premium Allocation Charges, Mortality Charges, Management Fee and Surrender Charges.
To understand it better, let’s consider ULIP plan by Edelweiss Tokio Life named – Wealth Accumulation (Accelerated Cover). We took this example because all individual ULIP funds of Edelweiss Tokio Life are consistently rated 5 star by Morning star. This plan comes with PE and Managed Fund options, where one can invest in both debt and equity funds, so if one is looking for a balanced optionthis can be a great choice. Also since all Funds of Edelweiss Tokio Life are rated 5 star by morning star one can invest in any of the individual funds without any worries about fund performance.
Let’s understand what advantages ULIP provide over Mutual Fund:
1. You can easily switch among different funds in ULIP whereas in Mutual Fund no such option is available.
2. ULIP grows your wealth and provides life cover whereas Mutual Funds provides only an option to grow your wealth.
3. ULIP gives Tax benefit under section 80C whereas in case of Mutual Funds you get the tax benefit under section 80C only if you invest in equity linked saving scheme.
The other different Benefits of this plan are:
1. Discontinuance: If you discontinue the policy before 5 years then it will be locked until 5 years of completion. If you discontinue after 5 years, then you will get Fund Value minus any charges related to dis-continuity.
2. Surrender Benefit: You will get Fund value.
3. Death Benefit: Fund value or 105% of basic premium paid or Sum Assured.
In conclusion I would like to add that ULIP is great option for long term investment. While investing in ULIP one must keep in mind his risk appetite and also the consistent performance of the funds.
Hope this piece of information helps you selecting better ULIP for your wealth creation.
Really enjoyed this article.Thanks Again. Cool. Worton
Thanks!!
Thanks for your article. I would also like to say that the health insurance agent also utilizes the benefit of the particular coordinators of your group insurance plan. The health insurance broker is given a summary of benefits needed by somebody or a group coordinator. What a broker can is search for individuals and also coordinators which usually best complement those desires. Then he shows his referrals and if all parties agree, the actual broker formulates binding agreement between the 2 parties.