Key Features, Benefits, And Exclusions Of Unit-Linked Insurance Plans
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A Unit Linked Insurance Plan (ULIP) combines insurance and investment into a single plan. It's a capital market-linked plan that lets you invest in either stocks or debt funds, depending on how risky you want to be. In a word, it allows you to get the benefits of both investment and insurance. When you buy a ULIP, the insurance company invests a portion of your premium in bonds or equities. The leftover funds are used to meet the remaining expenses. As an investor, you won't have to worry about keeping track of your assets regularly since the insurance company's fund managers will take care of it for you. In your portfolio, you may also flip back and forth between debt and equity funds. ULIPs have a five-year locking duration.
Key Features, Benefits, Exclusions, and Other Information About Unit-Linked Insurance Plans
A few significant characteristics, advantages, and exclusions of a ULIP are listed below:
Unit Linked Insurance Plan Types
ULIPs serve a variety of purposes. They are as follows:
1. Health Benefits: Diseases and illnesses can strike us at any time and in any place. United linked health insurance provides financial assistance to meet high medical expenditures in times of emotional distress.
2. Children's Education: Every parent wishes for his or her child to have a bright future. To minimize the possibility of any sort of obstacle to your kid's professional progress, you could pick child plans that are unit-linked insurance plans. These are a combination of insurance and investment strategies.
ULIP Purchase Documents
To minimize any delays while purchasing a ULIP, keep the following documents available.
- A driver's license, passport, or voter identification card are all acceptable forms of identity. As identification, a PAN card is required. Proof of address is allowed in the form of a driver's license, passport, or voter's ID.
- Income tax returns, pay stubs, bank statements, and other documents are examples of proof of earnings.
Before You Buy, Think About These Factors
Make sure you know why you want a ULIP and how it will help you improve your financial status before you get one. Let's look at a few of them to see if they can help you choose the finest alternative. If you want to create funds for the future stability of your family, a child's future and marriage, and your retirement, ULIP could be one of the bankable choices.
Comparing insurance policies: First and foremost, you must select the coverage that is appropriate for your circumstances. Then, to evaluate ULIP's returns, you must compare it to other ULIPs on the market in terms of costs, premiums, performance, and the funds it invests in.
Riders
ULIP investors can purchase extra benefits, known as riders, for an additional price. These riders increase the value of the plan while also allowing you to customize it to meet your present and future financial objectives. The following is a list of the many types of riders accessible to you:
Permanent Disability and Accidental Death Benefit Rider: The assured may be involved in an accident that causes permanent disability or death during the policy's term. If the guaranteed individual dies, the nominee is entitled to the basic plan value plus the assurer's rider benefit. This rider's main function is to provide additional coverage for the life assured's family. If the assured life is permanently crippled or handicapped as a result of the accident, he or she may be unable to work or earn money to pay the premiums.
Exclusions
ULIPs do not cover all possible scenarios. They're also known as exclusions. You should be aware of these scenarios before finalizing your insurance plan so that filing claims is not a problem.
- Accidental death while under the influence of alcohol
- Deaths caused by suicide
- Death caused by drugs or alcohol
- Death can occur as a result of racing or other risky activities.
Take Away
The primary objective of an insurance policy is to financially safeguard your family in the event of a tragedy. Depending on your life stage and needs, you may pick from a variety of plans, such as pure protection, savings, child education, retirement (wealth generation), and so on. One such product is the Unit Linked Insurance Plan, which may be utilized as both an insurance and an investment instrument (ULIP).
Also read- Are ULIPs a Good Long-Term Goal Investment
