Questions

• What is a ULIP?
• What are features of ULIPs?
• What is Net asset value?
• What is a Fund Value and how is it calculated?
• What will my family receive if something happens to me?
• Is investment return guaranteed in ULIPs?
• Can I change / switch my asset allocation?

What is a ULIP?

ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with wealth creation opportunities in a flexible and transparent manner. In ULIPs, a part of the investment goes towards providing you life cover. The residual portion of the ULIP is invested in a fund which in turn invests in stocks or bonds; the value of investments alters with the performance of the underlying fund opted by you.

What are features of ULIPs?

1. Flexibility:In ULIP’s you have option to choose your premium, extra benefits or riders you want to add, a range of fund options to choose as per your risk appetite ..etc
2. Transparency: One of the key advantages that ULIPs offer is complete transparency which makes the working of a ULIP abundantly clear to the investor. Thus, you are empowered to make informed decisions on how to best use your ULIP.
3. Goal Based Saving: One of the prudent ways to do so is by investing in ULIPs which are long-term systematic investment options designed to address key financial goals. ULIPs help you cultivate a disciplined savings pattern which ensures that the money being set aside will go towards the fulfillment of the specific objective
4. Tax Benefits:You can avail this benefit for the premium you have invested under section 80C as per Income Tax Act,1961.

What is Net asset value?

Net Asset Value (NAV) is the value per unit calculated in rupees.

What is a Fund Value and how is it calculated?

Fund Value is the product of the total number of units under the policy and the NAV. The fund value for the purpose of claims, surrenders or any other clause stated shall be calculated on the basis of NAV.

What will my family receive if something happens to me?

In the unfortunate event of death during the term of the policy, the person appointed as nominee shall receive the higher of sum assured or the fund value. There are also certain ULIPs in market which give sum of Fund value & sum assured as death benefit.

Is investment return guaranteed in ULIPs?

Investment returns from ULIP may not be guaranteed.” In unit linked products/policies, the investment risk in investment portfolio is borne by the policy holder”. Depending upon the performance of the unit linked fund(s) chosen; the policy holder may achieve gains or losses on his/her investments. It should also be noted that the past returns of a fund are not necessarily indicative of the future performance of the fund.

Can I change / switch my asset allocation?

Yes, you can change the investment pattern by moving from one fund to other fund (s) amongst the funds offered under a particular product. Such a change between funds is termed as a Switch. There will be a flat charge levied for any switch over and above the free switches.