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ULIP PLAN - Unit Link Insurance Plan

Unit Linked Life Insurance Plan is a type of insurance that combines the benefits of savings and protection in a single plan. It is a combination of insurance and investment wherein the policyholder can pay a monthly or annual premium. Out of the premium paid, a small amount goes to secure life insurance and the rest of the money is invested in bonds, stocks, or mutual fund. 

 

With the help of ULIP Life insurance and investment, you can increase your savings along with protecting your loved one's future from unexpected times. ULIP policy offers the investors an option to either invest in equity or debt. Investing in the ULIP scheme can cover your loved ones with a high sum assured, which is given in case of the policyholder's death. In the ULIP Life insurance, the policyholder can withdraw a partial amount of the savings when required.

What is ULIP Meaning?

Unit linked insurance plan is an insurance plan that provides dual benefits in one policy. It is a mix of insurance and investment policy that helps to achieve the goal of life cover with wealth creation and along with life cover. The investment fund in the Top ULIP plan is collected based on debt or equity, or both. It matches the policyholder’s long-term goals like children’s education, retirement planning, buying a house, etc. You can switch your ULIP portfolio between debt and equity-based on your knowledge of market performance as well as risk appetite. 

 

In a ULIP investment, the number of units credited to the policyholder depends on the prevailing NAV as per that date and the premium amount paid. Under a ULIP policy, the nominee receives death benefit- in case of the policyholder’s demise during the term of the ULIP. If the policyholder survives the term of ULIP, he/she can receive the maturity value of the ULIP plan. The policyholder of ULIP is typically allowed to choose ULIP funds and assets to generate the returns. Even if the value of the ULIP investment falls below the sum assured, the nominee of the policyholder will be paid the death benefit as specified.

Why Do You Need to Buy ULIP Investment Plan?

  • Life Cover: ULIP plans invest in life cover, which provides a high return in case of the policyholder’s death.
  • Liquidity: Partial withdrawal is allowed in ULIP policy if you need it.
  • Long-Term Funds: The longer you invest in your ULIP scheme, the greater are your chances of receiving high returns.
  • Regular Savings: With the help of ULIP investment, you can save in a disciplined manner.

Importance of Top ULIP Plans

Unit linked life insurance plans have a number of advantages that make them an effective investment vehicle. Here are a few reasons why ULIPs is of utter importance when putting together an investment portfolio.

 

  • Flexible Investment choices

    By investing the premium in equities, debt, or other financial tools, you can opt between low, medium, and high-risk investment alternatives with the best ULIP plans. Investor can make their own decision based on their financial goals, risk appetite, and market expertise.

  • Absolute Clarity

    All specifics of the investment, including charges, the estimated rate of return, fund valuation, and other information, are provided to investors before purchase. Besides, investors are continuously notified of Net Asset Value (NAV), quarterly reports and annual account statements about the investment status.

  • Savings and Tax-Advantages

    ULIP allow investors to participate in market-linked gains without having to trade stocks. Furthermore, most ULIPs feature a 5-year lock-in period during which the investor can partially exit the plan if necessary.

     

    Furthermore, under section 80C of the Income Tax Act of 1961, premiums paid toward the policy are tax-deductible. The great aspect is that, upon maturity, the returns from a ULIP are tax-free under Section 10(10D) of the Income Tax Act.

  • Life Insurance

    ULIPs are insurance policies that provide financial security through annuity payments and life coverage. An annuity plan allows you to create an investment portfolio over time with consistent payments, which can then be used as a source of income once you retire. In the case of the life insured's demise, a life cover provides financial stability to their family.

Benefits of Unit Linked Insurance Plans

  • Regular Savings

    ULIP policy is a way to inculcate the habit of disciplined and regular savings, which will further help in long-term financial planning. By paying regular premiums in the ULIP investment plan, you can enjoy life cover with wealth creation benefits for your loved ones.

  • Tax Benefits

    Up to 1.5 lakh per annum can be availed as a tax deduction benefit under Section 80C of the Income Tax Act, 1961. The maturity returns are also exempted from tax under Section 10(10D), keeping into consideration the terms and conditions.

  • Protection

    A ULIP plan in India provides the protective benefit of a life cover, which helps keep your family and loved ones secure in your absence.

  • Potential for Growth

    You can earn higher returns from equity and debt funds in the ULIP policy. With this potential fund growth, you can achieve your long-term life goals like buying a new dream car, buying a house, funding your child’s higher education, funding your child’s marriage, and many more.

  • Flexibility of Investment

    In the ULIP plan, you can get flexibility and control over your invested money in many ways. There are options like fund switch, partial withdrawal, premium redirection, and top-up that provide different choices for the management and investment of your money in the ULIP investment.

  • Greater Rewards

    If you stay invested for a longer period and pay regular premiums, the insurance company adds to your savings through additional benefits and bonuses available in different forms. This will help in adding up to your savings amount and growth of money.

Features of ULIP Plan

In a ULIP plan, the premium paid by the policyholder is invested in a fund that will collect long-term savings. This fund will be decided as per the policyholder’s choice and according to his/her estimated risks. The premium paid is subject to various changes like mortality changes, administrative changes, fund management changes, etc. Under ULIP policy, no withdrawal is allowed for five years, which is the lock-in period. After this lock-in period, one can withdraw money partially without any termination.

 

Following are some of the other key features that will help you to buy ULIP online and offline:

 

  • Single-Premium

    In the ULIP policy plan, the policyholder must pay the entire premium amount as a lump sum at the beginning of the policy term.

  • Regular Premium Payment

    The policyholder of a ULIP policy has to pay a pre-determined premium amount on a periodical basis, i.e., annually, semi-annually, or monthly, based on the premium payment term opted for.

  • Number of Premium Payment Years

    The number of the premium payment years depends on the term of the policy that the policyholder has chosen. In most cases, the number of premium-paying years and the term of the policy are the same. However, in some policies, the insured gets the option of choosing the number of years of premium payment.

Who Should Buy ULIP Plan?

Anyone looking out for making financial investments must buy ULIP plan online for a hassle free purchase. Suppose you are looking for availing the multiple investment benefits of the market. In that case, you choose one of the most popular and reliable life cover with wealth creation instruments, like the  Unit Linked Insurance Plan online in India (ULIP). If you want to avail the dual benefits of life coverage and long-term investment, ULIP investment will help you reap those benefits. Moreover, the ULIP plans reap maximum returns through numerous instruments like equity funds, debt funds, or balanced funds. You can gain higher returns on your investment by purchasing the ULIP scheme.

 

Suppose you want to avail of life cover benefits and get coverage in times of the unfortunate event of death to help your family in times of financial crisis. In that case, you can choose to buy ULIP investment plan online as well as offline. Other than that, you can also avail long-term savings fund growth benefit for fulfilling future financial needs and requirements.

 

Along with the other numerous benefits, if you also want to avail of tax exemption benefits, the ULIP insurance policy helps you gain those benefits. If you are looking for investment options, selecting the instrument for investment is a crucial and cumbersome task. However, if you want to balance your insurance cover and maximized returns, the ULIP investment plan can be a favourable option.

How to Choose the ULIP Plan?

Following are the steps to be followed for choosing the ULIP plan:

 

  • Claim Settlement Ratio:
    Before buying the Top ULIP plan in India that suits you, check the claim settlement ratio of the insurance provider. The higher the ratio, the better the plan.
  • Performance of ULIP Funds:
    Before buying the ULIP Life insurance, you must assess the performance of the ULIP funds over a long time. ULIP equity funds offer high returns along with high risks, while debt funds offer lower returns at lower risks. Hence, the performance of different ULIP plans must be compared with its alternatives for making the right decision.
  • Solvency Ratio:
    The solvency ratio of any insurance provider provides the ratio of whether the insurance provider will honour its claims in the future. You must opt for an insurance company that offers high solvency ratio.
  • Investment Strategies Offered:
    Many ULIP plans offer investment strategies like Systematic Transfer Plans and investing based on the lifecycle. One must select the 
    ULIP policy that offers the strategies suited for you.
  • Charges:
    It would help if you took the charges of the ULIP before taking the final decision. You must choose the ULIP plan in India that is available at affordable charges. There are few typical charges associated with ULIP plans like switching charges, mortality charges, fund management fees, policy administration charges, and discontinued premium charges.

Why should you Buy a ULIP Policy?

  • Income Tax Benefits: Many people are unaware that the premiums paid for ULIPs are eligible for a tax deduction under Section 80C. This coverage has a twofold benefit that you can take advantage of.

  • Life Cover: Basically, ULIPs provide life insurance as well as investment opportunities. It provides security to a taxpayer's family in an emergency, such as the taxpayer's untimely demise.

  • Finance Long-Term Objectives: These are a suitable investment option if you have long-term goals like buying a house, a new car, and so on because the money is compounded. As a result, net returns are higher in general. This is true even if you choose to quit after the 5-year lock-in term instead of not investing the money and keeping it in a savings account or a fixed-income investment. However, in the case of ULIPs, it is to keep the policy active for a longer period to get the most out of it.

  • The Flexibility of A Portfolio Switch: ULIPS are typically constructed in such a way that they enable you to adjust your portfolio between debt and equity-based on your risk appetite and knowledge of how the market is performing. Insurance providers, on the other hand, only allow a limited number of free swaps.

Key Aspects to Consider as an Investor

Before investing in ULIPs, consider the following crucial factors:

 

  • Individual Financial Objectives: A ULIP is one of the solutions available if your financial aim is to build life cover with wealth and save money for retirement.

  • Risk Factor: Because ULIP investments are less diversified than ELSS, the risk of ULIP is likely to be higher than that of ELSS.

  • Investment Horizon: ULIPs have a 5-year lock-in term. If you give up a ULIP within the first 3 years, your insurance coverage will expire instantly. The surrender value, on the other hand, can only be reimbursed after three years.

  • Compare Different Offerings by ULIP: The next step is to analyse the ULIP offerings by various insurance providers once you've set your financial objective and the type of ULIP that will assist you in achieving it. Consider a comparison of hidden costs, premium payments, and ULIP efficiency, among other things.

     

    Furthermore, look into the kind of funds that the ULIP invests in to see what kind of returns you may expect from your investment.

Top ULIP Life Insurance Plans at Bharti A Life

Bharti AXA Life provides some of the insurance policy plans available in the market. The ULIP plan offered by Bharti AXA Life is the Bharti AXA Life Wealth Pro Plan. It aims to provide life insurance cover and growth in the investment of the policyholder. This policy offers a comprehensive financial solution to provide life cover of up to 10 times the premium amount. It thus helps build life cover with wealth over a long period and enables fulfilment of aspirations and dreams of the individual and his/her family.

 

The plan provides two variants to choose from growth variant and legacy variant. Moreover, multiple investment strategies are also offered to choose from as per the investor’s suitability and needs.
Other benefits included in the Ulip scheme are a death benefit, maturity benefit, loyalty addition, settlement option, and others.

 

 

Plan

Details

Bharti AXA Life Wealth Pro Plan

  • Entry Age: 0-65 Years
  • Maturity Age: 75 Years for Growth
  • Variant: 99 Years For Legacy Variant
  • Policy Term: 5-20 Years
  • Minimum Premium Amount: Single Pay*- Rs. 1,00, 000; Regular Pay – Rs. 25,000

Reasons to Combine Insurance and Investment in ULIP

  • In case of an early demise

    The investments you make now aim to achieve a long-term goal. Preferably, you wait for your investments to mature, expecting that they will assist you in achieving your long-term objectives. However, there is always a risk until the investments mature and assist the family in realising its objectives. If anything happens to you in the middle of your investment, it may be liquidated & withdrawn early to meet the family's immediate requirements. Also, the money left over after the partial liquidation won't be enough to meet the family's objectives, whether it's for a child's higher education, marriage or the partner's retirement.

  • Insurance offers excellent assistance when you need it most

    When you need help the most, insurance is there for you. In the initial phase of your career, the risk to your family's financial stability is substantially larger. Whether it's for your child's further education or wedding or your own retirement, your funds are little at the beginning.

     

    Life insurance coverage comes in handy in cases like these, ensuring that your family can achieve the intended goals even if you pass away unexpectedly.

  • Life insurance bridges the gap between the essentials and the preferred

    Your earnings will enable you to gather numerous household appliances, electronics, land, residential property, gold, and savings during your working life.

     

    However, if you are no longer present, purchasing these assets may remain a pipe dream. When there aren't many income-generating assets accessible, a life insurance policy could serve as a bridge. Loans are also commonly used to purchase large-ticket products such as a car or a home.

     

    In the case of your early demise, your family would have no choice but to auction your belongings to repay the debt. This is where life insurance firms' unit linked insurance plans (Ulips) helps.

     

    They safeguard your family by covering basic expenses while you are away and allow your family members to continue enjoying their lifestyle. Ulip, in addition, provides life insurance; let you invest in equities that normally generate substantial returns over ten years or more.

     

    The life insurance assures that other high-growth assets, including inequities and Ulips' investment component, continue to increase. Furthermore, life insurance is reasonably priced, particularly for online policies.

  • Life insurance allows you to invest in higher-risk, higher-growth opportunities

    You are better positioned to assume the higher risk for higher reward assets such as equities if you have appropriate life insurance to safeguard your family. This will also assist you in saving more money over a lengthy period, such as ten years or more.

     

    Evidently, blending insurance with investment by buying a combination product like Ulip offers you more advantages than first appears. The secret is to choose the right Ulip.

How to Invest for Long Term with ULIP Lock-In Period?

Short-term financial challenges can wreak havoc on your long-term financial plans. If things get difficult, we prefer to turn to investments that can be quickly liquidated. And that is when investment lock-in periods, such as those found in unit linked insurance plans online in India (ULIPs), come in handy.

 

  • Assures that your goal is protected

    Long-term life goals, such as retirement, necessitate large sums of money. Because large sums of money cannot be saved quickly, long-term continuous saves are required to attain various objectives. However, you may encounter financial emergencies that need you to spend a substantial amount of money.

     

    An early liquidation of long-term assets, such as your child's higher education, to meet a medical emergency, for example, may either jeopardise his education or force him to take out a student loan. In addition, if you take on the EMI monthly load of an education loan, your retirement funds will suffer.

     

    In case your child pays his student loan EMIs, he will save little or nothing during his early working years. A lock-in term, such as the one found in ULIPs, ensures that you save regularly in the early years, avoid liquidation, and save the required amount for your specified life goal.

     

  • Encourages people with bonuses to stay invested

    When you begin long-term investing with a ULIP, you usually set aside money for a specific purpose, such as your child's higher education or wedding. These objectives are anticipated to take 10-20 years to achieve.

     

    However, while keeping your usual monthly costs, you may encounter situations where you require a large sum of money in a short period. It could be anything as simple as raising funds for a child's school admissions.

     

    These are not things you can fit into your monthly budget or cover with minor savings. However, if you cannot withdraw funds from investments such as ULIPs during the initial years due to a lock-in, you will have saved a substantial amount at the end of the necessary 5-year lock-in term.

     

    When contrasted to considerable amounts over a longer period, the temptation to liquidate a smaller savings amount during an emergency will be stronger. Hence, your money has a better chance of increasing unrestricted over time and producing the growth you desire. As a result, you are compelled to make plans for crises, such as an emergency fund with liquid investments equal to 3-6 months of living expenses. In any event, you will need to find the money somewhere else during an emergency, which is where investment plans come in.

     

  • Aids in surviving short-term turmoil

    Long-term, i.e. 8-10 years or more, equity is considered one of the -performing asset types. However, the investments are vulnerable to high volatility in the short term.

     

    Individual investors who are new to stock investments may be disturbed by excessive short-term volatility. Some may even withdraw assets prematurely on big market drops, missing out on long-term gain opportunities.

     

    You can't make a sudden and premature withdrawal from ULIPs because they have a minimum 5-year lock-in period, which also helps you tap the long-term growth potential of equities. As long-term investment plans pass the 8-10 year mark, you become accustomed to the turbulence, which settles down to more consistent returns.

     

    Investors pick the greatest investment plan that allows them to access their funds in an emergency. But, often, this facility causes more harm than good because consumers wind up undoing their hard work overtime by making rash decisions to abandon long-term assets.

     

    Short-term emergencies won't derail your progress toward long-term goals like your child's higher education because of lock-in periods in investments like ULIPs.

     

How to Calculate ULIP Plan Returns?

ULIP plan returns can be calculated easily by following certain steps. With the help of the online calculator, you can calculate the estimated investment returns. While using the ULIP calculator, the buyers must consider details like premium payment frequency, types of funds, expected rate of returns on investment, amount of money to be invested, etc. Firstly, log in to the online ULIP calculator. As per your suitability, select the premium to be paid for an investment, the minimum amount being Rs. 1500 per month. In the next step, select the frequency of premium payment. Then select the policy's tenure and the amount of premium payment they want to allocate for investment. Next, the investor will have to select the lock-in period of investment. The ULIP plans offer a minimum lock-in period of 5 years. Still, according to the experts, it is more beneficial to gain maximum return on investment by investing for a long period. As the last step, the investor must select the funds they want to invest their money in. However, before investing, it is highly important to check how the fund has performed in the market. The ULIP calculator is very easy and hassle-free to use. Along with estimating the returns, the ULIP calculators also take into consideration the inflation rates.

ULIP Charges

There are fees associated with ULIPs, which can be broken down into several categories. The following are the ones you should be aware of.

 

  • Charges for Premium Allocation

    Premium allocation charges are imposed - ahead of time - on the premium paid by the investor. Medical charges and underwriting costs are examples of early expenses incurred by a corporation when providing insurance.

  • Charges for Policy Administration

    Such charges are deducted on a regular basis to reimburse the insurance company for the costs of keeping a life insurance policy.

  • Charges of Surrender

    According to the policy documents, the deduction for the partial or full redemption of premature units is referred to as these charges. These fees are calculated as a percentage of the fund's value or the premium paid.

  • Charges of Mortality

    The insurer bears the costs of providing a life insurance policy to the insured, which vary depending on the policy's age and sum assured. These fees are debited from your account monthly.

  • Costs for Fund Management

    The total amount is invested in stock and debt instruments via ULIP funds. These fund management fees, which vary by fund and plan, are paid by the insurer. When computing the net asset value, or NAV, the sum is deducted.

  • Charges for Transferring Funds

    ULIP plans allow you to invest your hard-earned money in a variety of investment choices with multiple debts and equity exposure, as well as the ability to swap between funds for which your insurance provider will charge a switching fee. In addition, most policies offer a limited number of free switches each year.

  • Charges for Cancellation

    The insurer deducts a nominal cost if a plan is terminated prematurely within the lock-in period. These charges are identical for practically all insurance because IRDA determines them.

    After subtracting allocation and other expenses, ULIP premiums are invested in debt and equity instruments chosen by the investors. The total value of the fund's investment is divided by the total number of units to arrive at the fund's worth.

  • Charges for Partial Withdrawals

    After the policy has expired, the policyholder can make lump-sum withdrawals from the fund, subject to pre-determined restrictions. On the other hand, partial withdrawals are subject to charges, as stipulated in the relevant policy document.

Steps to Buy Unit Linked Insurance Plan Online in India

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ULIP plans, like any other life insurance product, can be acquired online quickly and easily. So, let's have a look at how to buy ULIP plan online.

 

  • Go to the insurance company's official website.
  • Select the Top ULIP plan in which you want to invest.
  • Select the plan's insurance term and premium payment period.
  • To make a payment, click Proceed.
  • You have the option of paying monthly, half-yearly, or annually.

 

Investors can pay using a debit card, a credit card, an online wallet, or net banking to buy ulip policy online.

ULIP Plan Claim Process

The first step involves informing us about your intention to file the claim. Get a hold of the claims form that you can find both at our physical outlet and Bharti AXA’s online portal. The claims form will involve filling in details such as to cause of death, the name of the beneficiary, the location of the death, and personal details such as the date of birth of the beneficiary, policy number and name of the beneficiary, amongst other aspects.

 

The next step involves arranging all the necessary documents that you will need to ensure that your claim goes through successfully. Some of the main documents that you need to keep handy if you are looking to file a claim include the death certificate pertaining to the deceased registered under the policy, age of the deceased, original copies of the policy document, ID proof of the beneficiary, and any medical reports/records about the beneficiary’s demise.

 

Once the claims form and the necessary documents are submitted, the claim will be processed within 30 days. In some cases, additional steps will be undertaken by the insurer. This is especially true in cases where claims are made within three years since the purchase of the policy, in case of which additional investigation is undertaken. This includes checking with the hospital where the deceased registered under the policy was admitted before his/her demise.

What Our Customers Say

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Website journey was very simple & Good, Flexi term pro plan fulfill all my requirement as I was looking, I was already existing customer of Bha...

LG Karthik Anand

Kancheepuram | Jun 25, 2021

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I was worried for my family protection so I have decided to purchase Term plan, I connected to Bharti axa associate and got best experience, Purcha...

Yogesh Kumar

Sonipat | May 12, 2021

Types of Investment Plan We Offer

Bharti AXA Life Wealth Pro

  • An Individual Linked life cover with Insurance cum Savings Plan.
  • Choose a Variant: The plan offers you two variants to choose from a) Growtrh Variant b) Legacy variant
  • Grow your wealth further with Wealth booster
  • Multiple Investment Strategies to suit your investment needs
  • Tax benefits

Bharti AXA Life eFuture Invest

  • An affordable online Investment Plan.
  • Choose between two premium payment terms
  • Flexibilty of Partial withdrawal
  • Zero allocation charges
  • Tax Benefits
Read More

Bharti AXA Life Grow Wealth

  • Flexibility in Investment Tenure T
  • Single Life/Joint Life Option
  • Grow your wealth further with Loyalty Additions
  • Multiple Fund Options to suit your investment needs and zero premium allocation charges
  • Tax benefits

ULIP Plans - Frequently Asked Questions (FAQs)

When should I start planning for my ULIP Plan savings?

It is always better to start as early as possible to achieve your goals. It is always advisable to be prepared for unforeseen circumstances for the better future of your loved ones and family.

Is ULIP a good option for investment?

A ULIP plan is a policy plan that offers both investments as well as insurance benefits. Besides providing life cover, the ULIP policy also provides the benefit of market-linked returns. ULIP helps inculcate the habit of regular and disciplined savings, which also helps in long-term financial management. Hence, the ULIP insurance plans are a great option for creating life cover with wealth creation benefits for your loved ones and family members.

What is the ULIP plan meaning?

ULIP is an insurance and investment plan that is an abbreviation for Unit Linked Insurance Plans. ULIP plans are a category of goal-based financial solutions that offer dual benefits of investment and financial protection. ULIP Life insurance and investment plans are usually bought for long-term capital gains and offer a financial protection cover.

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Factors Impacting ULIP Plan Premium

Unit Linked Insurance Policy

An insurance plan which gives benefits both of life insurance as well as investing in different funds consisting of different investment instruments like stocks, money market securities or government bonds. However, the returns are dependent on market performance and the policyholder has to bear the investment risk.

Date Of Commencement Of Risk

It is the date which represents the beginning of Life Cover.

Grace Period

A specified period after a premium payment is due, in which the policyholder may make such payment, and during which the protection of the policy continues

---A period during which the Policyholder can still make the overdue Premium Payment without attracting any interest. Grace period is of 30 days from the original due date as stipulated by regulation and the benefits under the Policy remain unaltered during this period.

Investment Fund Allocation Instruction

It is the instruction given by the Policyholder to allocate his premiums towards the purchase of units in the desired Investment Fund.

Investment Risk/market Fluctuations

The performance of the Investment Fund depends on the financial markets and may increase or decrease. The risk of such fluctuations or uncertainties due to market related factors is called as the Investment Risk.

Lock In Period

It refers to the number of years for which the funds need to be kept invested in the policy and cannot be withdrawn.

Disclaimer: IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER
Note: During the settlement period, the investment risk in the investment portfolio is borne by the beneficiary.
Note: Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time

For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale
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