What is ULIP (Unit Linked Insurance Plan)?

ULIP or Unit Linked Insurance Plan is a type of Insurance, which combines the benefits of protection and saving in a single plan. The major advantage that a ULIP has over the traditional wealth creation tools is the benefit of a Life Cover. As a result, your money can grow and at the same time, your loved one’s future is protected from life's unexpected turns.

How ULIPs work?

A ULIP is both an insurance policy and an investment. The policy specifies a death benefit - the amount the nominee will be paid if the policyholder passes away during the term of the ULIP. In addition, if the policy holder survives the term of the ULIP, he/she can also get the maturity value of the ULIP. This will be the amount generated by the ULIP investments in equity and/or debt. The policyholder is typically allowed to choose ULIP funds and asset classes to generate these returns. This is the investment component of a ULIP.
Note that even if the value of the ULIP investments falls below the sum assured specified in the ULIP, the policy holder’s nominee(s) will be paid the death benefit specified.

Benefits of ULIPs

  • Regular Savings:
    ULIPs inculcate the habit of regular and disciplined savings, which is the key to successful long-term financial planning. With regular premium payments, you can enjoy the benefits of wealth creation for your loved ones.
  • Protection:
    ULIPs provide the protective benefit of a Life Cover, which keeps your family secure in your absence.ULIPs provide the protective benefit of a Life Cover, which keeps your family secure in your absence.
  • Flexibility of Investment:
    You will have flexibility and control of your money through the following ways:
        1. Fund Switch – An option to move your money between equity, balanced and debt funds
        2. Premium Redirection – An option to invest your future premium in a different fund of your choice
        3. Partial Withdrawal## – An option that allows you to withdraw a part of your money
        4. Top-up – An option to invest additional money to your existing savings
  • Tax Benefits~:
    Investment in ULIPs is eligible for deduction from taxable income under Section 80C of the Income Tax Act, 1961 up to Rs 1.5 lakh per annum. The maturity proceeds of the ULIP are also exempt from tax under Section 10(10D) of the Income Tax Act subject to conditions specified therein. If the ULIP investor dies during the term of the ULIP he/she will be entitled to the death benefit specified in the ULIP policy and the amount received on death is exempt from tax u/s 10(10D) of The Income Tax Act 1961. Switching between ULIP funds also does not attract any tax
  • Potential for Growth:
    There is a potential of earning higher returns from the power of equity and debt funds. This will help you achieve your life-goals such as buying a new home, your dream car, funding your child’s higher education and much more.
  • Greater Rewards for Staying Invested***:
    Your money grows further as the insurance company adds to your savings through bonuses/ additions and are available to you in ULIPs in different forms (such as, Loyalty Additions and Wealth Boosters)^.

How to manage ULIP funds?

  • ULIPs are a long term investment and hence you should only invest in them with a long term time horizon. Note that the minimum lock-in period is 5 years, so you must be prepared to invest for at least that long.
  • Many ULIPs give the option of systematic transfers from debt to equity ULIP funds. If you pay an annual premium, this can initially be invested in a debt fund and systematically be transferred to an equity fund. This is very similar to the highly popular Systematic Transfer Plans (STP). Consider using it, in order to reduce your investment risk.
  • Alternatively, several ULIPs offer a lifecycle based strategy that automatically splits your money between equity and debt based on your age. Consider adopting this strategy if you are investing in the ULIP for your retirement.
  • You should periodically review the performance and prospects of your ULIP funds. You should switch out of ULIP funds which have underperformed or funds whose asset class is overvalued. You can do this by switching out of an equity ULIP fund and moving into a debt ULIP fund. This will not attract any tax charges. It may attract some costs but many ULIPs give a certain number of free switches to investors every year.

How to find the best ULIP plans?

  1. Claim Settlement Ratio:
    This figure tells you what percentage of claims have been paid out by the insurance company. The higher the ratio, the better. ICICI Pru Life has a claim settlement ratio** of 97.88%.
  2. Solvency Ratio:
    This ratio tells you whether the insurance company will be able to honour its claims in the future. Once again, look for a high ratio for solvency. The IRDA requires insurers to have a solvency ratio of at least 1.5. ICICI Prudential Life Insurance has a solvency ratio# of 2.52.
  3. Performance of ULIP funds:
    ULIPs are an investment as well as insurance products. You should review the performance of ULIP funds over long term. Remember that ULIPs can have equity, balanced and debt funds suitable for investors/policy holders with different risk appetite and investment time horizon. ULIP equity funds offer high returns with high risk and debt funds offer lower returns with lower risk. The performance of ULIP funds should compared with their respective benchmarks over long time periods (eg: Nifty 50, BSE100, NSE 500, BSE 200 or Crisil Composite Bond Index).
  4. Charges:
    Go for a ULIP with affordable charges. The typical charges associated with a ULIP include a premium allocation charge, policy administration charge, fund management fee, mortality charge, discontinued premium charge and switching charge.
  5. Investment strategies offered:
    Many ULIPs offer investment strategies such as Systematic Transfer Plans and lifecycle based investing. Look for ULIPs that offer the strategies most suited to your goals.

Why should I start planning my savings now?

  • The earlier you start planning with a ULIP, the earlier your goals can be achieved.
  • It is advisable to be prepared for unforeseen circumstances, and ensure that your loved ones are taken care of, even in your absence.
 

No matter what your need is, we have a solution

Take a look at the wide range of Unit Linked Insurance Plans that we offer:

Designed for the preferred customer like you, ICICI Pru Signature offers life cover to secure your family along with flexible investment options to help you achieve your goals.

ICICI Pru ULIP Signature
  • Financial protection for your loved ones with life cover
  • Return of all Premium Allocation charges more than once*
  • Choice of 4 portfolio strategies and wide range of funds
  • Enjoy policy benefits till 99 years of age with Whole Life policy term option

A single premium plan with the potential to create wealth for your multiple goals while providing life insurance cover to protect your loved ones.

Pru1 Wealth
  • Invest only once and enjoy benefits for entire policy term
  • 100% amount invested in wide range of funds
  • Enjoy a life insurance cover to protect your family’s dreams
  • Get Wealth Boosters* as a percentage of your single premium

Achieve your dreams with the best of both worlds - the potential for high returns without the risk of losing your money*.

I-pru_Guaranteed_Wealth_Protecto
  • Guarantee on the money you invest
  • Premium Payment as per your comfort
  • Rewards of Wealth Boosters and Loyalty Additions for long term investments
  • Safety of a Life Cover

With ICICI Pru Smart Life
A plan that grows your investments, secures the educational milestones of your children and provides life cover.

I-pru_SmartKid_Solution
  • Easy access to your money
  • Choice of lump sum pay-out and waiver of premium
  • Rewards of Wealth Boosters and Loyalty Additions for long term investments

You have always strived for special things that offer the best value for your money. This plan helps you take care of your finances along with offering a Life Cover.

I-pru_Elite_Life_Super
  • Choice of portfolio strategies` to suit your needs
  • Rewards of Wealth Boosters^ and Loyalty Additions+ for long term investments
  • Enjoy the safety of a Life Cover based on your desired level of protection

This plan is designed keeping ‘you’ in mind & offers unmatched customisations to suit your unique needs while offering the protection of a Life Cover.

I-pru_Elite_Wealth_Super
  • Premium Payment as per your comfort
  • Customise your portfolio strategies` to suit your needs
  • Enjoy the safety of a life cover based on your desired level of protection

A plan that safeguards your family’s future with life cover along with potential to create wealth, even when you are not around.

I-pru_Smart_Life
  • Choice of investment strategy to suit your needs
  • Security of your loved ones with premium waived in your absence
  • Enjoy the safety of a Life Cover based on your desired level of protection

Fulfill your family’s dreams and desires with the growth potential of equity or debt along with a Life Cover to safeguard their future in your absence.

Life Time Classic
  • Choice of portfolio strategies` to suit your needs
  • Easy access to your money
  • Enjoy the safety of a Life Cover based on your desired level of protection
  • Rewards of Wealth Boosters+ and Loyalty Additions^ for long term investments

*On Maturity, you will receive an amount which is higher of Assured Benefit or fund value. Assured Benefit will be 101% of total premium paid, which is applicable only on maturity of the policy and does not apply on death or surrender.

 

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ICICI Pru Signature
The total of Premium Allocation Charges (excluding Top-up premium allocation charges) deducted in the policy net of taxes will be added back to the Fund Value at the end of 10th policy year. The same amount will be added again at the end of every 5th policy year thereafter. UIN: 105L177V01

ICICI Pru LifeTime Classic
The Company will allocate extra units as below provided all due premiums have been paid:

Premium payment term Loyalty Additions Wealth Boosters
(End of year 6 and 7) (End of year 8 and onwards) (End of every 5th year, starting from the end of 10th policy year)
5 years – 6 years 0.10% 0.10% 1%
7 years – 9 years 0.15% 0.30% 1%
10 years and above 0.15% 0.30% 2%
Single Pay 0.25% 0.25% 1.5%

For single pay policies with a policy term of 5 years, a loyalty addition of 0.25% of the average of daily Fund Values, including Top-up Fund Value, if any, in that same policy year, will be payable at the end of the fifth policy year.

Each Loyalty Addition will be a percentage of the average of daily Fund Values including Top-up Fund Value, if any, in that same policy year as mentioned in the table above.

Wealth Boosters will be a percentage of the average Fund Values including Top-up Fund Value, if any, on the last business day of the last eight policy quarters.

Loyalty Additions and Wealth Boosters will be allocated among the funds in the same proportion as the value of total units held in each fund at the time of allocation.

The allocation of Loyalty Additions and Wealth Boosters is guaranteed and shall not be revoked by the Company under any circumstances.

If the premium payment is discontinued anytime after 5 years, the number of years for which premiums have been paid will be considered as the premium paying term for the purpose of deciding the Loyalty Additions & Wealth Boosters to be paid for the rest of the policy term as per the table above.

The Policyholder can have funds in only one of the Portfolio Strategies. UIN: 105L155V03

 

ICICI Pru Elite Life Super
The Company will allocate extra units as below provided all due premiums have been paid:

Premium payment term Loyalty Additions Wealth Boosters
(End of year 6 and 7) (End of year 8 and onwards) (End of every 5th year, starting from the end of 10th policy year)
5 years – 6 years 0.10% 0.10% 1%
7 years – 9 years 0.20% 0.35% 1%
10 years and above 0.20% 0.35% 2%
Single Pay 0.30% 0.30% 1.5%

For single pay policies with a policy term of 5 years, a loyalty addition of 0.30% of the average of daily Fund Values, including Top-up Fund Value, if any, in that same policy year, will be payable at the end of the fifth policy year.

Each Loyalty Addition will be a percentage of the average of daily Fund Values including Top-up Fund Value, if any, in that same policy year as mentioned in the table above.

Wealth Boosters will be a percentage of the average Fund Values including Top-up Fund Value, if any, on the last business day of the last eight policy quarters.

Loyalty Additions and Wealth Boosters will be allocated among the funds in the same proportion as the value of total units held in each fund at the time of allocation.

The allocation of Loyalty Additions and Wealth Boosters is guaranteed and shall not be revoked by the Company under any circumstances.

If the premium payment is discontinued anytime after 5 years, the number of years for which premiums have been paid will be considered as the premium paying term for the purpose of deciding the Loyalty Additions & Wealth Boosters to be paid for the rest of the policy term as per the table above.

The Policyholder can have funds in only one of the Portfolio Strategies. UIN: 105L156V03

 

ICICI Pru Elite Wealth Super
The Company will allocate extra units as below provided all due premiums have been paid:

Premium payment term Loyalty Additions Wealth Boosters
(End of year 6 and 7) (End of year 8 and onwards) (End of every 5th year, starting from the end of 10th policy year)
5 years – 6 years 0.10% 0.10% 1%
7 years – 9 years 0.25% 0.40% 1%
10 years and above 0.25% 0.40% 2%
Single Pay 0.40% 0.40% 1%

For single pay policies with a policy term of 5 years, a loyalty addition of 0.40% of the average of daily Fund Values, including Top-up Fund Value, if any, in that same policy year, will be payable at the end of the fifth policy year.

Each Loyalty Addition will be a percentage of the average of daily Fund Values including Top-up Fund Value, if any, in that same policy year as mentioned in the table above.

Wealth Boosters will be a percentage of the average Fund Values including Top-up Fund Value, if any, on the last business day of the last eight policy quarters.

Loyalty Additions and Wealth Boosters will be allocated among the funds in the same proportion as the value of total units held in each fund at the time of allocation.

The allocation of Loyalty Additions and Wealth Boosters is guaranteed and shall not be revoked by the Company under any circumstances.

If the premium payment is discontinued anytime after 5 years, the number of years for which premiums have been paid will be considered as the premium paying term for the purpose of deciding the Loyalty Additions & Wealth Boosters to be paid for the rest of the policy term as per the table above.

The Policyholder can have funds in only one of the Portfolio Strategies. UIN: 105L157V03

 

ICICI Pru1 Wealth
The company will allocate extra units at the end of the policy term, provided monies are not in the DP fund. Wealth Booster will be allocated among the funds in the same proportion as the value of total units held in each fund at the time of allocation. The allocation of Wealth Booster units is guaranteed and shall not be revoked by the Company under any circumstances.

Policy Term 5 Years 10 Years
Wealth Booster 2.50% of Single Premium 2.75% of Single Premium
For 10 year policy term, wealth booster will be 2.75% of single premium including top up premiums less partial withdrawals if any. UIN:105L175V01

 

ICICI Pru Smart Life

The Company will allocate extra units as below provided all due premiums have been paid:

Benefit When Percentage
Loyalty Additions End of every policy year, starting from the end of the sixth policy year 0.25%
Additional Loyalty Additions End of every policy year, starting from the end of the sixth policy year if the premium for that year has been paid 0.25%
Wealth Boosters End of every fifth policy year, starting from the end of the tenth policy year One Pay: 1.50%
Limited Pay/Regular Pay: 3.25%

Loyalty Additions, Additional Loyalty Additions and Wealth Boosters will be equal to the above percentage of the average of the Fund Values on the last business day of the last eight policy quarters.

These units will be allocated among the funds in the same proportion as the value of total units held in each fund at the time of allocation.

Allocation of Loyalty Additions units, Additional Loyalty Additions units and Wealth Boosters units is guaranteed and shall not be revoked by the Company under any circumstances.

The above additions will not be added if your monies are in the DP Fund.

The Policyholder can have funds in only one of the Portfolio Strategies. UIN: 105L145V04

 

ICICI Pru Smart Kid
Under this benefit, following the date of death of life assured, provided all due premiums have been paid, units equivalent to the installment premium will be allocated by the company on subsequent premium due dates.
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 consists of money from lapsed policies. UIN: 105L145V04

Disclaimer:

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.

# As per IRDA Annual Report 2017-18

**Claim statistics are for Financial Year 2017-18 and is computed basis individual claims settled over total individual claims for the financial year. For details, refer to Public Disclosures in our Website.

~Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Applicable taxes will be charged extra as per prevailing rates. Tax laws are subject to amendments from time to time.

*** These bonuses are added to your savings as a reward for staying invested for a long time.

^Please refer your UliP policy document for detailed information about Loyalty Additions and Wealth Boosters.

##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.

W/II/3628/2018-19


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