Why Return of Mortality Charge (RoMC) is a Revolutionary Idea

Unit-linked Insurance Plans (ULIPs), a long-term investment product, allows you to do both - acquire a life cover and also invest in a disciplined way over the long term in equity or debt oriented funds to maximize the return on your investment.

Of course, it comes with a cost - the cost to cover the risk of insuring your life. This cost is known as mortality charge in insurance parlance, and it depends on the age of the insured, among other factors. The older you are, the higher the mortality charge is. The other factors taken into account while calculating the mortality charge include gender, health, occupation etc. Typically, it is charged per annum per Rs 1,000 life cover.

Return of Mortality Charges: A Revolutionary Step

We discussed briefly the advantages of remaining invested for a long term. What if the insurance company sweetens the deal by promising to return the whole amount deducted from your premium as mortality charges if you stay invested till maturity without ever skipping the premium payment.

This is a new feature that Bajaj Allianz Life Insurance Company started in its new-age ULIP, Bajaj Allianz Life Goal Assure. Under this feature, called Return of Mortality Charges (RoMC), the total amount of mortality charges deducted in respect of life cover throughout the policy term, is added back as RoMC, to the fund value at the end of the policy term.

Of course, ROMC is not applicable in case of a Surrendered, Discontinued or Paid-up policy and is payable only if all due regular premiums under the policy have been paid up to date.

RoMC is nothing but the insurer's way of rewarding a policyholder for investing long-term and paying regular premiums in a disciplined manner. It is that little extra which the policyholders of Bajaj Allianz Life Goal Assure can enjoy to meet their life goals.

RoMC is path-breaking innovation in the insurance sector to incentivize long-term and disciplined investment habits. This makes a stronger case for the investor to remain invested for the full term of the policy and gain maximum out of it.