What is ULIP (Unit Linked Insurance Plan)?
ULIP (Unit linked Insurance Plan). ULIP’s are a combination of insurance + investment. A small portion of the money invested goes to securing your life whereas the rest of the money is invested in the market. Policyholders can pay premiums monthly/annually.
In Unit Linked Insurance Plans(ULIP), the investments made are subject to risks associated with the capital markets. This investment risk in investment portfolio is borne by the policy holder. Thus, you should make your investment choice after considering your risk appetite and needs.
Another factor that you need to consider is your future need for funds. HDFC Standard Life offers you a variety of unit-linked insurance products to suit your goals - be it for your retirement planning, for your health, for your child's education and marriage or for investment purposes.
Which Investor Class Are They Most Suited For?
How ULIP Is Structured?In a Unit Linked Insurance Plan (ULIP), the premiums you pay are invested in the funds chosen by you after deducting allocation charges and charges including those for managing funds,policy administration and for providing insurance cover are deducted from the funds by cancelling certain units.
The value of each unit of a fund is determined by dividing the total value of the fund's investments by the total number of units.
Advantages Of ULIP?
- Market Linked Returns
- Life Protection Investment and Savings
Features of ULIP
Ulip ChargesThe following charges are deducted from your policy towards the cost of benefits and administration services provided by HDFC Standard Life Insurance -
Switching Between FundsHDFC Standard Life Insurance offers you the flexibility to switch between funds available under a unit linked Insurance plan.
You may wish to switch between equity and debt funds, in times when there is market volatility or interest rate fluctuations. At times, changes in your financial standing, liabilities or risk profile may also require that you change your investments accordingly.
You may also make partial withdrawals from your funds after a certain specified period, subject to a partial withdrawal charge. The withdrawal amount should be at least the minimum prescribed withdrawal amount and the fund must not fall below the minimum fund value after the withdrawal.
You can make a full withdrawal of your policy before its maturity date. However, surrender charges will be applicable in this case.
Frequently asked questions
✅ What is a ulip and how does it work?
Unit Linked Insurance Plans (ULIPs) are a category of goal-based financial solutions that offer dual benefits of protection and Investment. Your Unit linked Insurance Plan is linked to the capital market and offers you flexibility to invest your units in equity or debt funds depending upon your risk appetite. ULIPs are typically bought for long term capital gains and offer a protection cover too.
✅ What should one keep in mind while investing in ULIP?
- Applicable charges
- Payment on premature surrender
- Investment fund options
- Features and benefits
- Limitations and exclusions
- Lapsing and its consequences
- Other disclosures
✅ What are some advantages of ULIP's?
Market linked returnsUnit linked insurance plans give you an opportunity to earn market-linked returns as part of the premiums are invested in market linked funds which invest in different market instruments including debt instruments and equity in varying proportions.
Life protection, Investment and SavingsUnit linked insurance plans offer the twin benefits of life insurance and savings at market-linked returns. Thus, you have the opportunity to invest your money to earn higher returns, while taking care of your protection needs. Investing in unit linked Insurance plans helps to inculcate a regular habit of saving and investing, which is important for building wealth over the long term.
FlexibilityHDFC Life offers different ULIP's (Unit Linked Insurance Plans) which are just right for you and can help you meet your specific financial objectives.
- The option to switch between investment funds to match your changing needs.
- The facility to partially withdraw from your fund, subject to charges and conditions.
- Single premium additions to enable the policy holder to invest additional sums of money (over and above the regular premium) as and when desired, subject to conditions.
ULIPs from HDFC Life
Having known the various advantages that ULIP offers, it is advisable to choose the right plan depending on your age group and the corresponding goals at various life stages.
Unit Linked Insurance Plans offer you a wide range of flexible options such as