Understand Unit Linked Plan (ulip’s)

Bimadeals

Posted Date: Saturday, February 06, 2010 | Viewed: 121

Posted In Category: Business and Finance » Insurance and Leasing Articles

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In last few years Ulip is more popular among individuals rather than a term plan or an endowment plan. The people who have chosen term or endowment plan are switching to Ulip’s. But do we really know ulip’s?????
Or we are going with the crowd……………

Before going for Ulip, one should understand its features and should judge accordingly. Whether these were the features that you were looking in your insurance plan??

Let us understand Ulip first; Ulip is an abbreviation of Unit Linked Insurance Policy.
Definition- Ulip is a combination of insurance & investments. Unlike traditional plans the ULIPS are subject to the risk factors where the risk is borne by the policyholder, the investment risk is related with the stock markets & accordingly the NAVs of the units go up & down depending upon the fund’s performance & the factors affecting the capital market.
Different funds offered by Ulip

Advantages of Ulip
1) Ulip Plans provide life cover.
2) Tax saving under 80CC.
3) It also gives you opportunity to invest in stock market.
4) Gives you the option of long term investment too.
Basic Charges on Ulip’s
1) Premium Allocation Charges- It normally includes initial & renewal expenses apart from commission expenses.
2) Mortality Charges- This charge is provided for the Cost of Insurance Coverage under the plan. A lot of factors are responsible for mortality charge like age, amount of cover etc.
3) Fund Management Fees- These are fees levied for management of the fund(s) and are deducted before arriving at the Net Asset Value (NAV)
4) Policy/Administration Charges- These are the fees for administration of the plan and levied by cancellation of units. This could be flat throughout the policy term or vary at a pre-determined rate.
5) Surrender Value- A surrender charge may be deducted for premature partial or full encashment of units wherever applicable, as mentioned in the policy conditions.
6) Fund Switching Charges- Limited fund switching charges may be allowed every year.
7) Service Tax Deduction- Before allotment of the units the applicable service tax is deducted from the risk portion of the premium.

Things to remember before going for a Ulip
1) Invest for a long term- A long term investment in ulip will give you good results.
2) Be sure about the charges- Make sure about the charges that the company will take from you. There should not be any hidden cost.
3) Invest at your own risk- Investing in ulip is also risky, you should check the risk appetite before investing.
BimaDeals.com is a junction point where users meet to solution of their exact requirement. We provide comprehensive comparison chart for Ulip Plans.

Disclaimer: Please note that the information provided is collected from sources publicly available & we believe to be reliable. The website doesn’t warrant the accuracy, reliability & absolute information available on the website. Participation by site visitors or registered customers is on a voluntary basis. The policies are offered by various life Insurance & non-life insurance offering companies and Bimadeals does not seek to, either directly or indirectly, advise, offer, solicit or recommend that any person who is or proposes to become its member should purchase the Policy.

Article Tags: ulips, ulip, ulip plan, ulips plan, ulips plan

About Author:
Author has been engaged in understand unit linked plan for a long time. Currently he is focusing to provide important information on ULIPs and investment plan. At bimadeals.com we are committed to provide Best ulip plan.

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Understand Unit Linked Plan (ulip’s)

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