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What Is Top-Up Facility In ULIP?

Due to the rapidly growing demands for a Unit Linked Insurance Plan (ULIP), the investors wish to add value for money with a ULIP investment. Although the ULIPs have massively gained popularity, not many investors are completely aware of the features offered by a ULIP plan. One such feature that needs to be addressed to the investors is the top-up facility of a ULIP. With the help of a top-up facility, the investor can enhance the ULIP investment as well as channel his/her investment in the right direction to achieve his life goals.

Investment plans also act as tax-planning tools, as many avenues help reduce tax liability. There are different types of investment plans, and by choosing the right one, you can invest according to your needs and grow your savings.Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th July 2024
Modified on: 7th July 2024
Reading Time: 15 Mins
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Before availing the top-up facility for a ULIP Policy, understand the benefits of this feature to make an informed decision in the future. By the end of this article, you’ll be able to find out what a top-up facility is and how it works towards making your ULIP Policy better. Let’s begin by first finding out everything in detail about the top-up facility:

What is a top-up facility?

A top-up facility is provided by the insurance companies to increase the invested amount of the policyholder in order to make it a part of his/her policy. It can be availed only if the policyholder makes the premium payments on regular intervals. With the help of a top-up facility, the investor can contribute to the growth of his/her savings until the existence of his/her policy. Moreover, the top-up facility must be availed on a base policy.

When an investor purchases a ULIP Policy, he/she has the option to pay the top-up premiums anytime based on his/her suitability. A top-up premium is the amount paid at irregular intervals over and above the basic premium. This premium should not exceed a certain percentage of the total premiums which are paid every year. The insurance companies allow the minimum top-up premium approximately for Rs. 2,000, however, it depends from company to company.

Each top-up premium made during the currency of the contract, except for pension products, shall have insurance cover treating them as single premium. You need to check the limit of the top up premium you can pay before opting in. The next step towards knowing everything about the top-up facility is by making the right use of it. To make the most of these top-up facilities, the policyholder must know how to enhance their ULIP returns with its help. So if you’re wondering how to enhance ULIP returns with the top-up facility, take a look below:

How to enhance ULIP returns with the help of the top-up facility?

1. Consider associated costs

The main aspect of a top-up facility is the payment of the premium. Apart from the top-up premium, the other costs of the top-up facility are fund management charges and mortality charges. These varied costs associated with a top-up facility vary as it depends from one insurer to the other.

2. Opt for online payment

Certain insurance companies allow the online payment of top-up premiums. Online payment of top-up premiums is one of the preferred and the quickest way. Since the online availability is quite new, check with insurance companies whether or not they provide their policyholders with this option of online top-up premiums

3. Accumulate surplus cash

If you have an excessive accumulation of wealth in your funds, see to it that you channelize the money in the right direction. One such way of doing so is by opting for a top-up facility under a ULIP Plan. In case your ULIP policy has been continuously performing well, you can top it with a premium as per the limits defined by the insurer on their respective product.

To sum up, the top-up facility option in a ULIP Policy has been introduced by a majority of insurance companies as an enhanced feature of their policies. Top-ups are a simple and convenient tool, which help you in making adhoc contribution towards your investment in a ULIP Plan. A top-up facility is helpful to take your ULIP investment forward in the long run.

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~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

**Past performance is not indicative of future performance.

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.

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*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

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Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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The Unit Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.

ULIPs are different from the traditional insurance products and are subject to the risk factors. The premium paid in ULIPs are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Bajaj Allianz Life Insurance Company Limited is only the name of the Life Insurance Company and Bajaj Allianz Life Goal Assure II- A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN No.: 116L180V02) is only the name of the unit linked insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.

Bajaj Allianz Life Goal Assure II - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L180V02)

**Return of Mortality Charges at Maturity (ROMC) is payable at maturity, provided all due premiums have been paid

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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