ULIP PLAN

1. 

   rahulkedia
   

   new member
   Joined: Jun '09
   Posts: 2

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   What is ULIP plan? How does it work should I invest in ULIP plan?

   Posted 2 years ago #
2. 

   devanand
   

   senior admin
   Joined: Jun '09
   Posts: 94

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   Please refer to the ULIP plan life cycle article in articles section. I found the ULIP article explained there very well.

   IBS

   Posted 2 years ago #
3. 

   rajkumar
   

   new member
   Joined: Jun '09
   Posts: 3

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   ULIP is a two-in-one plan.
   It provides double benefit:-
   1) Insurance coverage
   2) Investment benefits

   In ULIP, part of investment provide life coverage & the other part is invested in fund which in turn invest in stock market, govt. bonds etc.How it works is very well shown in the article section of ULIP plan.

   Ex- Consider an individual paying a premium of Rs 100,000 p.a for 20 years.
   As per the charges 30% is deducted in the 1st year i.e 30,000 & 32% deducted in 2nd year i.e 32000. If the rate of interest paid is 10% then after the completion of 2nd year his fund value would become [70000+(70000*10%)]+[68000+(68000*10%)]=151800. From 3rd year onwards 5% is deducted i.e 5000. At the end of 3rd year total value is 151800+[95000+95000*10%]= 2,56,300. A customer who wants to surrender after 3rd year might consider this return as loss but technically speaking this is gain in tax that would have been levied on the 100000. Hence it is advisable not to surrender the policy before 5th year. If you want to surrender do so after 5th year as it would prove to be beneficial.
   Hence it is advisable to invest in ULIP plan but make sure the investment is for long term of 8-10 years.

   Posted 2 years ago #
4. 

   manavjindal
   

   junior member
   Joined: Jun '09
   Posts: 6

   Reputation:11

    

   According to me ULIP plan is not a good investment

   ULIP is a mixture of insurance with investment and the consequence of this is huge charges with small amount of investment.
   It is better to invest in term plan since it is the cheapest form of insurance.
   By investing in term insurance the policy holder will receive insurance coverage with no charges and minimum annual premium payment. Invest the remaining money in mutual fund and earn good return from investment.

   Posted 2 years ago #
5. 

   ramlal
   

   junior member
   Joined: Jun '09
   Posts: 5

   Reputation:8

    

   Hi Friends,
   I would like to warn everyone who is planning to buy ULIP plan, an agent offered me a plan & explained that I need to pay premium only for three years and after that I can withdraw my fund value whenever I feel like, not informing about the surrender charges. Whereas the reality is that there is more than 50% charges in starting years - so if your fund value is 90,000 rupees you will get only 45,000 back. And to add to that,if you pay premium of Rs 30000 annually sum assured is 450000,so why do u need to invest in order to get the same amount back after 15 years. the CHARGES that have been levied till now are more than 3 times the regular TERM insurance to cover the risk. please be careful and view the illustration carefully before taking the policy.

   Posted 2 years ago #
6. 

   Anonymous
   

   Unregistered
   
   

   Reputation:0

    

   A ULIP is a market-linked insurance plan.

   The difference between a ULIP and other insurance plans is the way in which the premium money is invested.

   Premium from, say, an endowment plan, is invested primarily in risk-free instruments like government securities (gsecs) and AAA rated corporate paper.

   While ULIP premiums can be invested in stock markets in addition to corporate bonds and g secs.

   Posted 2 years ago #
7. 

   Anonymous
   

   Unregistered
   
   Posts: 2

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   ULIPs serve the purpose of providing life insurance combined with savings at market-linked returns. To that extent, ULIPs can be termed as a two-in-one plan in terms of giving an individual the twin benefits of life insurance plus savings. This is unlike comparable instruments like a mutual fund for instance, which does not offer a life cover.

   Posted 2 years ago #

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