Sunday, February 18, 2007

Review of a Unit Linked Insurance Policy in India

Unit linked insurance plans (ULIP) is a bestseller today. Life Insurance companies are falling over each other to introduce and market their ULIPs. Backed by aggressive selling by agents and the booming stock market, the sales figures they have notched up is mind blowing.

Birla SunLife Insurance has introduced Supreme Life, again a ULIP. Visit their site and they have the following superior benefits to talk about:

The plan is a unit linked non participating plan. It offers a choice of 6 investment fund options to invest your premiums into, depending on your risk profile. Additionally you have the flexibility to allocate the premiums (including top ups) in varying proportions into the different funds to create your own fund option. The opportunity to top up your Fund Value whenever you have additional savings. High liquidity in the form of partial withdrawals and surrender benefitsA choice of 2 death benefits to opt from based on the benefits you would like your nominees to receive. An Accidental Total Permanent Disability benefit in the event of Total Permanent Disability (TPD) caused by accident, injury or illness.

I was interested in the charges for which the details are as under:

Premium Allocation charge (as a percentage of Policy Premium (excluding underwriting extra, Top-up premium) is 5% for the first year and 2% from 2nd year onwards.

The Premium Allocation Charge on Top up and Underwriting Extra (if any) is 2%.

Other charges are: The Mortality Charge of the Life Insurance Coverage , Fund Management Charge not exceeding 1.5 % per annum of the Fund Value, Policy Administration Charges for the Life Insurance Coverage, a Sum Assured charge, Surrender charges(applicable in case of surrenders only)

So take a decision on buying a ULIP after you get the entire information from your advisor.
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