Suppose you are looking to buy a ULIP plan to meet the combined requirement of insurance and investment. Making the purchase online may not only save time and complicated paperwork but can also take you through a smooth and hassle-free buying experience.
Checking out this step-by-step procedure may help you here.
Research and compare ULIP policies:
There are quite a few insurance companies available who have ULIP plans on their platter. Each of these products has its own set of features and benefits, which may cater to varied needs and expectations. So how do you choose the one that is tailor-made for you? To trace the best ULIP plan in India that matches your criteria, you may need to do good research and compare the details. A good look at the following things may help.
Life cover and policy term:
A ULIP plan is designed to fulfil both your insurance and investment needs. So, while the life cover needs to suffice for your financial protection requirements, the policy tenure should match the wealth creation goals you have set for yourself. Different ULIP plans come with different sum assured and policy terms. You may pick a sum that would smoothly cover the financial needs of your family in your absence. On the other hand, if you have long-term goals like a retirement corpus or funds for your child’s marriage, a long policy tenure may be worthy. Since the power of compounding works well in longer horizons, it may bring you a bigger scope of wealth creation.
Benefits and riders available:
Different plans come with different sets of features and benefits as well as optional riders to enhance your coverage. However do note that these benefit are available at an additional nominal premium. Some benefits include especially those related to coverage, fund value, and income taxes, as well as the availability of important riders covering accidents and critical or terminal diseases, are crucial, as these would optimise your gain from the policy. Hence, checking them beforehand and taking your pick accordingly may be a fruitful practice.
Charges:
A ULIP plan has various charges for premium allocation, fund management, mortality, administration, and services like surrender or withdrawal. The deduction of these charges may affect the life cover and fund value of your policy. Thoroughly checking and comparing these charges in each option can help you select the one with lower charges to gain more from your investment.
Rules and regulations:
Facilities and services like surrenders, withdrawals, fund switches, or premium redirections are governed by specific rules set by different insurers. These rules can affect your choice and timing of opting for these facilities. Hence, comparing plans based on the rules may help you find the policy that best suits your needs.
Exclusions and limitations:
Often insurance policy coverages exclude or get limited for certain areas or situations. It’s critical to identify them before you make your choice of plan. This may save your family members from unwanted hassles at the times of crises.
Claim settlement and solvency ratio:
Claim settlement and solvency ratios are the reflection of an insurer’s track record of settling claims and financial stability. A high ratio in each case may lead to a higher probability of getting death claims settled. While you compare plans, these ratios should be critical points on your checklist. Selections based on them may help your loved ones avoid unwanted struggles in the event of the unforeseen.
Evaluate your financial goals:
Everyone has separate targets to fulfil in life. Insurance or investment opportunities chosen based on those targets may fetch better benefits or returns. So, that makes it even more important to choose and evaluate your financial goals correctly. Whether you want to fund your child’s overseas education or buy a property at retirement both require separate choices of plans. So, before you finalise your choice of ULIP, it may be a wise step to identify specific goals and the fund needed to support it. Based on that, taking your pick may be a good bet.
Understand fund options and allocation:
A unit-linked insurance plan splits your premium to utilise the portions in its insurance and investment component. A part of the premium is invested in market-linked funds of your choice based on risk appetite to earn returns. As the policy expires, the amount you receive as a maturity benefit is the total fund value on the date. But not all ULIPs offer a similar number and nature of funds to choose from. Hence, understanding the ULIP offerings in terms of fund choices that suit you, the track record of fund performances, and the allocation and reallocation of your investment through fund switch and premium redirection facilities may be critical. An informed choice of a ULIP plan based on this knowledge may help avoid potential losses and lead to better gains.
Check premium payment options:
To keep your ULIP policy active till the end, you would need to pay all the premiums on time as per the decided schedule and frequency. So, it’s important that your choice of ULIP policy aligns with your affordability and convenience. Checking the available premium payment options and picking the one that suits you may be worthwhile. For example, if you are a salaried person, a regular pay option with annual, half-yearly, quarterly, or monthly premium payment as per your convenience may seem a good fit.
Review policy features and benefits:
Before you take the final step towards the purchase of a ULIP, reviewing the policy features and benefits is an important check. You can look for the smallest details in features, tax benefits available, the rider choices, investment offerings and options, and charges and penalties associated just so that you don’t regret it later on.
Fill in the application form:
As you take the first step towards the purchase procedure, you’ll need to fill in an application form. A careful reading of the terms and conditions and eligibility criteria may help you on this part. You can fill in the details online, check the ULIP calculator for premiums payable for the coverage you need, and make the necessary choices of options as and when required to furnish the required information correctly. You may resort to the available guidelines to submit the relevant supporting documents.
Make the first premium payment:
As you submit the application, you will have to wait for the insurer to approve the policy proposal. The risk cover will only begin after the receipt of the premium. After the proposal is accepted, it’s time for the first premium payment to complete the purchase. You can make an online payment through your preferred avenue from the options available.
Receive the policy confirmation and documents:
Once you are done with the online application and the corresponding first premium payment, an online confirmation will reach your email inbox. You may receive the policy document in the mail post the necessary approvals from the insurance company.
