In a Unit Linked Insurance Policy, the money you pay as premium goes into a pool called the Unit Linked Fund. This fund is managed by the insurance company and is invested in a range of equity and debt instruments to offer you the dual benefit of a Life Cover and a potential to get maximum benefits.

A Unit Linked Fund can be divided into a number of individual parts called units.

Net Asset Value (NAV) is the price of units of a fund and is calculated in rupees.

Fund Value is the total value of your premiums that are invested in various funds of your choice.

It can be calculated by using the formula,
Fund Value = Total Number of units under a policy x Net Asset Value

For example, if you have 1000 units of a fund for which the NAV is ₹100, the fund value will be ₹1,00,000.

The benefit you will receive at the end of policy term is called Maturity Benefit. The Maturity Benefit will be equal to the Fund Value at the time of maturity.

You should verify:

  • All the charges deductible under your policy, such as policy allocation charges, fund management charges and other such relevant charges
  • Features and benefits of your policy, such as loyalty additions, premium payment options and more such relevant benefits
  • Limitations and exclusions under your policy like waiting period, lock-in period, pre-existing illnesses and more such relevant information
  • Lapsation* of your policy and its disadvantages
  • Other disclosures
  • Illustrations showing the benefits payable to you under prescribed scenarios of 4% and 8% returns.

*If you do not pay your policy premium before the end of the grace period, all benefits provided under your policy will stop. This process is called policy lapsation . Grace Period is the extra time given after the premium due date to pay your premium. Please refer your policy document or product brochure to know more.

The money paid incase of an unfortunate event depends on the type of the policy. If you have a One Pay policy* your loved ones will receive the Death Benefit, equal to higher of A or B or C.**

If you have a Limited Pay* or Regular Pay* policy:

  • For entry age less than 50 years, Death Benefit is the higher of (A+B) or C.
  • For entry age greater than or equal to 50 years, Death Benefit is the higher of A or B or C

** Where:

A = A fixed amount called the Sum Assured including Top-ups, if any and reduced by any partial withdrawals+

B = Fund Value including Top-up Fund Value, if any

C = Minimum Death Benefit#

These choices are:

  • One Pay Policy: Policies where you have to pay the premium only once
  • Limited Pay Policy: Policies where you have to pay premiums for a limited number of years and not for the entire duration.
  • Regular Pay Policy: Policies where you have to pay premiums for entire duration of the policy

#Here, the minimum death benefit will be 105% of all premiums paid.
*Some of the ULIPs offer you choice of premium payment duration.
+Partial withdrawals are allowed after the completion of five policy years provided monies are not in DP Fund. You can make unlimited number of partial withdrawals as long as the total amount of partial withdrawals in a year does not exceed 20% of the Fund Value in a policy year. The partial withdrawals are free of cost. DP Funds refer to Discontinued Policy fund and consist of money from lapsed policies.

Switch is an option to move your money between equity and debt funds. You can use the switch option only if you have opted for the Fixed Portfolio Strategy^ in your Unit Linked Insurance Policy. It is applicable only on the money that you have already invested in the existing funds. To move your new premiums into a different fund, you can use the premium redirection service.

^Fixed Portfolio Strategy is an option using which you can manage your money by investing in the equity and debt funds of your choice.

With Premium Redirection, you can choose to invest your future premiums in a different fund. The premiums which were earlier invested will remain in the same funds as chosen by you.

Yes, you can withdraw+ a part of your earnings at any time after completion of five years. However, the value of withdrawals in a year cannot be more than 20% of the fund value . For example, if your fund value is ₹1,00,000, then you can withdraw a maximum of ₹20,000 in the year.
+Provided monies are not in DP Fund. You can make unlimited number of partial withdrawals as long as the total amount of partial withdrawals in a year does not exceed 20% of the Fund Value in a policy year. The partial withdrawals are free of cost. DP Funds refer to Discontinued Policy fund and consist of money from lapsed policies.

Yes, you can stop your policy by initiating a surrender request. The charges for surrendering your policy vary from product to product. On surrendering your policy, you will receive the Surrender Value which will be equal to your fund value on the date of surrender. No payment will be made to you before the lock-in period of five years. While you can discontinue your policy before the policy term, it is advisable to stay invested for at least 10 years to enjoy the maximum benefits offered by your policy.

The choice of receiving your Maturity Benefit as equal annual pay-outs over a period of five years is called Settlement Option.
Redemption means encashing the units at the current NAV offered by the company. This is applicable in case of Partial Withdrawals, Switches, Maturity, Surrender, Settlement Option or on payment of Death Benefit.

The date on which your Life Cover begins is the date of commencement of your policy. This will be the date shown in your policy certificate. On the same date, the age of the life assured* and term of the policy are calculated.

*Life Assured is the person whose life is covered in the insurance contract.

Regular Premium Policy is a policy in which you choose to pay your premiums throughout the policy term. The frequency of premium payments can be monthly, yearly or half-yearly, as per your convenience.

In a Regular Premium Policy* or a Limited Premium Policy* the monthly premium due date is the date on which your premium payment is due. For example, if your policy’s date of commencement is January 4, then your monthly premium due dates will be February 4, March 4, and so on.

However, if the date of commencement is  January 31, then the next monthly premium due date will be the last date of every calendar month, such as February 28/29, and so on.
*Some of the ULIPs offer you choice of premium payment duration. These are:

  • Limited Pay Policy: Policies where you have to pay premiums for a limited number of years and not for the entire duration.
  • Regular Pay Policy: Policies where you have to pay premiums for entire duration of the policy
Cover Cessation Date (date of maturity) is the date on which your policy reaches its maturity or the date when your policy duration ends. On this date, your Maturity Benefit becomes payable to you.
Unlike traditional products, Unit Linked insurance products are subject to market risk, which affect the Net Asset Values. The customer shall be responsible for his/her decision. The names of the Company, Product names or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns.
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