How to make the best of your ULIP?

Things to keep in mind to get the best of your ULIP

1. Understand the key features of your ULIPs

ULIPs offer you the benefit of a Life Cover² and also give you the opportunity to grow your wealth. To get the best out of your ULIPs, understand the following benefits available in ULIPs:

1. Fund Switch – An option to move your money between equity and debt funds.

2. Premium Redirection – An option to invest your future premiums in a different fund of your choice other than your base fund.

3. Partial Withdrawals – An option that allows you to withdraw a part of your money.

4. Top-ups – This option allows you to invest your surplus money, either once or multiple times in your existing policy.

To understand all benefits offered under your policy, it is advisable that you read the product brochure carefully. This will help you make the right decision.

2. Choosing ULIP Plans fund options depending on your goals

3. Taking right amount of Life Cover²

ULIPs are designed to help you meet your financial goals like funding your child’s education or planning for your retirement. In addition to securing your goals, ULIPs also secure your family. They provide a lump sum amount called the Life Cover² so that your loved ones can achieve their dreams even in your absence. You can opt for a minimum Life Cover² of 10 times your annual premium. To increase your family's financial security, you can also increase the Life Cover² offered under your policy.

Let us understand this with an example. For an annual premium of `1,00,000/- you can get a minimum Life Cover<sup>2</sup> of `10,00,000/-. As a result, you can increase your family's level of protection by increasing your Life Cover².

4. Stay invested with ULIPs for a long term

5. Get tax^* benefits

Under the Income Tax Act, 1961, you can save taxes on your hard-earned money with Unit Linked Insurance Plans. You can get tax advantages at different stages of your life insurance policy.

Stage 1: Entry Advantage

You receive tax benefits* on your premium payments under the Sections 80C, 80CCC and 80D

Stage 2: Earnings Advantage

The growth of your money is not taxable*

Stage 3: Exclusive Switching Advantage

You can make completely tax-free* debt-equity Switches**

Stage 4 Exit Advantage

You also receive a tax-free* Maturity Benefit^#

*Tax benefits are subject to conditions under Sections 80C, 80CCC, 80D, 10(10A) and 10(10D) of the Income Tax Act, 1961. Tax laws are subject to amendments from time to time.
**Switch is an option to move your allocated money between equity and debt funds
^#Maturity Benefit is the amount you receive when your policy ends

6. Know the charges in your ULIP

ULIPs help you meet two of your most important financial needs - Protection and Savings. Both these benefits have some charges attached to them and it is important to understand the following charges before purchasing the ULIP:

Premium Allocation charge

Policy Administration charge

Mortality charge

Fund Management charge

In ULIPs, the overall charges reduce in the long term resulting in wealth creation.

Please note that your life insurer reserves the right to revise the charges over time.

Click here to know more about the charge structure of ULIPs.

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