As the investment and insurance world has seen some rapid advancements ever since their inception in the mid ‘90s in India, there have been a number of plans and policies that have risen to the top and fallen to ashes over the period of years.
ULIPs guarantee a certain risk cover for the policy owners, they also provide them with the choice of choosing high, medium or low-risk investment options, while also allowing the insured to switch between the same.
Unit Linked Insurance Plans have been a major contributor in the investment world, especially ever since the norms were made flexible and user centric by the IRDA in 2008. If you have been considering to invest your money in ULIPs as well, then you should probably ask yourself some of these things before you start:
- Is this plan meant for me?
Are you looking to invest in a short term or a long term plan? Do you have the capacity to take a lot of risk, or do you wish to play it reasonably safe? Are there a number of short term goals you’d like to fulfill while keeping your eyes on the bigger goal or is it only the bigger goal you are striving for? By keeping these things in mind, you’ll be able to decide better whether or not a Unit Linked Insurance Plan works for you. It should probably help to know that though a ULIP provides flexibility in the form of partial withdrawals, such withdrawals are allowed only after 5 years.
- How much do I need to pay?
Earlier, there were some heavy charges being levied in the form of Premium Allocation charge, fund management charge, mortality charge, administrative charge, etc. Now, due to the serious restrictions imposed by the IRDA, one can get the allocation fee waived off completely. You could do a comparison between the various ULIPproviders to find out which one is coming out to be the cheapest for you. Generally, the ULIPs provided by almost all insurance companies and can provide you with some of the best offers on ULIPs.
- How much coverage will I be able to get?
In ULIPs investment options, the assured sum depends upon the premiums that the policy holder pays. The premium coverage is expressed as a multiple of the annual premium or single premium paid. The multiple allowed varies from plan to plan and so assess the coverage available in the plan under consideration.
We have many more Life Insurance Help Articles Now Available.