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ULIP

Shridhi Jain (Company Secretary) (1678 Points)

13 May 2011

Will anybody help me the meaning of ULIP and its concept ? How it works ?

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ULIP means unit link insurance plan. This is basically a insurance product which offer u the risk cover/insurance cover benifit with investment. If we separate the part of insurance from this product, it's look like mutual fund product. This is new innovative product which offer u insurance with investment. Suppose if u take the ULIP policy For premium of Rs.10000, then in this case u get 5 times risk cover above ur annual premium i.e Rs.50000(it is depend on ur ULIP plan). But from ur premium the company will deduct charges for that it is around 25 to 50 percent of ur first year premium. And from second year onward it will be reduce upto 2 percent(vary from company to company and product to product). In ULIP they deduct mortality charges, admin. Charge, agent commission., surrender charges(at the time of surender only) etc. every year. After deducting all this charges the remaining amount will invest in share market or bond or any other option u select in application form. ULIP are befited to those person who are ready to wait atleat 10 years. This is a long term insuarnce cum investment product. Plz take the advice of good experiance & knowledgeble fianacial advisor for the investment in ULIP product to avoid misselling of product. For any help or advice i m always on caclubindia.