Key highlights
Dual Benefits of Insurance and Investment
ULIPs offer life insurance protection while also allowing your premium to be invested in market-linked instruments like equities and debt.
Flexibility in Fund Allocation
You can choose from various funds (equity, debt, balanced) based on your risk appetite and switch between them as your financial goals change.
Partial Withdrawal Option
After a mandatory lock-in period (usually 5 years), you can make partial withdrawals to meet urgent financial needs without surrendering the policy.
Tax Benefits
ULIPs offer tax deductions on premiums paid under Section 80C of the Income Tax Act, and maturity proceeds are tax-free under Section 10(10D).
Top-Up Facility
You can invest an additional amount during the policy term to enhance your corpus, taking advantage of market growth.
Transparency and Control
Regular statements provide details on fund performance, charges, and policy status, allowing you to track your investment.
Exclusion
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Suicide Clause
If the policyholder commits suicide within a specified period (usually one year), only a part of the premium paid is refunded.
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Non-Disclosure of Pre-Existing Conditions
Claims may be rejected if critical health information was not disclosed during policy issuance.
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Losses Due to Market Risks
ULIP investments are subject to market volatility, and there is no guarantee of returns.
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Policy Lapse
If premiums are not paid on time and the policy lapses, the risk cover ceases, and fund value may reduce significantly.
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Risk of Underperformance
In case of poor market performance, the investment returns may not meet expectations, impacting the corpus.
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Charges and Deductions
Various charges such as premium allocation, fund management, mortality, and policy administration charges can reduce the investment value over time.
Types of ULIP
Equity-Oriented ULIP
Primarily invests in equity funds, suitable for individuals with a high-risk appetite looking for substantial returns.
Debt-Oriented ULIP
Invests mainly in fixed-income securities, ideal for conservative investors seeking stable returns.
Balanced ULIP
A combination of equity and debt investments, balancing risk and reward, suitable for moderate risk-takers.
Single-Premium ULIP
A one-time lump sum investment with the dual benefit of insurance and long-term growth.
Regular-Premium ULIP
Premiums are paid periodically (monthly, quarterly, annually) throughout the policy term, allowing systematic investment.
Child ULIP
Designed for securing a child’s future, offering financial support for education and other major life goals.
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Why ULIP is Essential?
Offers life insurance cover, ensuring your family is financially protected in your absence.
The potential for higher returns by investing in equity, debt, or a mix of funds, depending on your choice.
ULIPs help accumulate wealth for long-term goals like children’s education, retirement, or buying a house.
The ability to switch between funds allows you to optimize returns as per changing market conditions.
Regular premium payments instill financial discipline, promoting consistent savings over the long term.
The lock-in period encourages long-term investment, helping you reap the benefits of market growth.
