Features of Unit Linked Insurance Plan

• Unit linked insurance plan is a unique investment that gives you chance to enjoy twin benefits of protection through insurance and saving through investment. A part of such investment goes towards unit linked life insurance cover, while residual portion is invested in any investment fund such as stock, bonds etc. Investment in ULIP is denoted in units and is represented by the net asset value (NAV). The value of the policy varies according to the value of underlying assets. Invested amount of premium is pooled together after subtracting all associated charges and premium for risk cover to form a unit fund. A unit fund is a component of ULIP fund.

• A unit linked insurance plan combines features and benefits of investment and insurance. Common features and benefits of unit linked life insurance plan have been discussed below:

• Depending upon risk level, customers can choose to invest funds in various schemes such as debt, balance and equity funds under unit linked life insurance plan. If policyholders choose debt plan, they have to invest their premiums in debt securities like bonds, treasury bills etc. In case of equity plans, they have to pay their premium by investing in equity market.

• Policy holders can switch their money from one fund to another during the term of the policy.

• Policyholders can make lump sum addition to investment at any time which is known as top up. With this addition, the risk cover will remain same but amount going into fund for investment will change.

• Policyholders can redirect current premium into any fund, in any proportion, irrespective of the fund in which it has been earlier invested.

• If policyholder does not pay premium in a particular year, no new units will be added to his fund. However, his fund will be reduced to the extent of additional charges such as administration, fund management etc.

• Policyholders can ship out of unit linked insurance plan at anytime by withdrawing the amount invested. The loss will be a nominal fee.

• In order to choose right ULIP, it is essential to consider your saving budget and your risk bearing level. Also beware of any unscrupulous agents and if you choose any agent to instruct him to keep you regularly updated about your unit linked insurance plans. Many private and public organizations offers unit linked insurance products. It is essential to compare products offered by different companies on parameters such as risk, expenses, premium payments, returns etc. It is also advisable to be a knowledgeable investor and take help of unbiased, independent and experienced insurance agent to get best return from your ULIP investment.

• Terry Jonnathan is a specialist in article & blog writing. Working with Insurance industry as a consultant has enriched his knowledge base and his passion for writing got fire. Now he has researching on Unit linked insurance planand he has find interesting fact related to this like what is the ULIP plans & what is the best unit linked insurance plans for you .

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