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Get Promoted to Your Dream Role Post Retirment
WATCH VIDEO -
Enjoy Guaranteed* Life-Long Income with Bajaj Allianz Life Guaranteed Pension Goal
KNOW MORE -
There is lot to remember in Life, Set renewal premium payments to Auto Pay
WATCH VIDEO -
Get Life Cover worth Rs.1 Crore at Rs.21 per day2 – Bajaj Allianz Life Smart Protect Goal
CALCULATE NOW -
Fulfill your Life Goals with Bajaj Allianz Life Goal Assure
KNOW MORE -
Life Insurance Term Plan with Return Of Premium
WATCH NOW -
Get your Life Goals Done with Bajaj Allianz Life Smart Assist – BINA MILEY MIL-KAR
KNOW MORE -
Paying your Renewal Premium is Quick and Easy!
PAY NOW -
Know the right amount of Insurance you need in just a few steps!
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Avail Term Insurance Tax Benefits under Section 80D
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Know how to invest money during the covid-19 pandemic!
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ULIP - Unit Linked Insurance Plans
ULIP - Unit Linked Insurance Plans are one of the preferred modes of investment to meet your dual needs of insurance cover and wealth creation. ULIP Plans will help you realize your life goals.
What is ULIP (Unit Linked Insurance Plan)?
ULIP or Unit Linked Insurance Plan is a type of life insurance plan, which offers you the benefits of both investment and insurance. ULIP plan gives you an opportunity of wealth creation while providing you the security of a life cover. Unit Linked Insurance Plans i.e. ULIPs are among one of the preferred choices for securing your long-term life goals.
With the incidence of untimely deaths rising, life insurance has become a necessity. Buying a life insurance policy takes up financial resources and resources are always limited. What if one could get the protection of life insurance along with market-linked returns? Return on your investment is as critical as achieving long-term life goals like children’s education, buying a dream car or owning a house for which the investment has been made. A unit-linked insurance plan or ULIP may help you accumulate wealth to achieve life goals along with the protection of life insurance. ULIP plans are one of the most preferred investment options in the Indian financial markets now.
A ULIP plan is a unique financial tool that combines the benefits of savings and protection under the same policy. Policyholders get the option to invest in a number of market-linked ULIP funds depending on their risk profile and investment horizon and simultaneously enjoy the benefits of insurance. Through the investment funds, policyholders can invest in equity, debt or a combination of both depending on their choice.
All ULIP funds have different investment portfolios to cater to the needs of different investors. For instance, an individual seeking high returns and has a high-risk tolerance can invest in a fund with higher percentage of exposure to equity, while a risk-averse policyholder can opt for a fund with a higher proportion of debt.
Market-linked returns coupled with flexibility has made ULIP plans one of the most preferred investment options. ULIP investors have the flexibility to switch between funds as per market conditions or as per change in their financial goals. Insurance companies also offer a certain number of free fund switches in a year, improving the efficiency of ULIP plans. Some companies like BALIC offer unlimited free switches in its new-age ULIP plans. Another aspect of investment in ULIP is the transparency it offers. ULIP charges are transparently disclosed to the investors. Levies like allocation charge and fund management charge can be taken into account before buying a ULIP. Having a clear idea of all the charges in advance makes it easier to achieve the financial goal with ULIPs.
ULIP investments are subject to market risks and investors have to bear the risk to his/her portfolio. While investing in ULIPs, it is important to consider your risk appetite.
How ULIPs work?
ULIP plans have merged the benefits of insurance with market-linked returns. While other types of insurance plans also provide savings benefits, the returns are generally moderate due to the nature of the product. By investing in the capital markets, ULIP plans may provide returns that are generally higher than other insurance plans in the long run provided you have stayed invested in a disciplined manner over a long duration.
When you buy a ULIP policy, the insurer specifies a death benefit. The death benefit is the amount that the nominee will receive in the event of the life assured’s death. If the life assured outlives the policy, he/she is eligible to receive the maturity benefits. The maturity benefits of a ULIP policy is the amount accumulated by investing the policyholder’s money into specified investment funds. These funds invest the money accumulated from multiple policyholders into equity funds, debt funds or a combination of both.
Just like mutual funds, ULIP investment funds are managed by a professional fund manager backed by research teams. The mechanism of ULIP funds is similar to that of mutual funds. After the policyholder opts for a fund, he/she is allotted units of the fund according to his/her investments. A Net Asset Value is derived based on the units in the fund. The ULIP NAV is evaluated and declared on a daily basis by insurance companies. Since the ULIP plan is an insurance product, the sum assured on death is guaranteed irrespective of the investment component, subject to product terms and conditions.
Features of a ULIP
A ULIP is distinct from other life insurance as well as investment products. Some of the differentiating features of ULIP plans are:
Investment and Insurance under a single plan
The market-linked returns offered by ULIP plans have made it one of the popular investment option.
ULIP helps in ensuring optimal wealth creation for investors through different market-linked funds Along with market-linked returns, ULIP plans also ensure that your family does not suffer in your absence. A sum assured on death is guaranteed under ULIP plans, just like any other life insurance plan.
Option to switch between multiple ULIP funds
It is difficult to predict market movements. Even experts with years of experience fail to anticipate market situations. The volatility of capital markets can be unnerving for some investors, especially if you are saving for a specific life goal.
ULIP plans provide an array of investment funds with different proportions of exposure to equity and debt or a combination of both. Some ULIP funds invest higher in equity instruments, while some invest higher in debt. Investors have the option to switch between these ULIP investment funds during the policy term. It helps in optimizing ULIP returns over the policy term.
The risk tolerance of an investor changes with age. For instance, policyholders can remain invested in an equity fund for the bulk of the policy term but opt for a debt fund at the end of the term. This entirely depends on the financial goal of an individual supported by other factors.
Premium redirection
Along with the option to switch between funds, ULIP returns can also be improved through the premium redirection facility. Investors can choose to allot future premiums between different available funds.
The percentage of the premium to be assigned to each fund can also be specified. With the premium redirection feature, policyholders can balance risk with returns by balancing the investment between equity and debt fund. The premium redirection facility coupled with the fund switching option makes ULIP a highly flexible investment option.
Partial withdrawals
ULIPs are long-term products and you have to remain invested for several years to reap maximum benefits. ULIPs have a lock-in period of 5 years to ensure a minimum duration of the investment. However, some ULIPs have in-built mechanisms to help investors take care of urgent situations.
After the mandatory lock-in period, investors are allowed to make partial withdrawals. Some ULIP plans offer unlimited withdrawals from the accumulated fund without incurring any charges. The withdrawals can either be free up to a certain limit or charged subject to terms and conditions mentioned under the respective ULIP policy.
Benefits of a ULIP investment plan
ULIP plans are dynamic products with an investment and life insurance component that offers a number of benefits. From inculcating a habit of savings to helping build wealth to achieve long-term life goals, ULIP benefits are innumerable.
1. Inculcates a habit of saving:
Saving is the first step to wealth creation. Only when you save diligently can you invest and grow your wealth. ULIPs inculcate the habit of disciplined savings in investors through regular premium payment. The regular premium payment term of ULIP requires investors to set aside a pre-decided amount on basis of the ULIP premium payment frequency they have opted for.
2. Helps in achieving life goals:
Investing with a long-term horizon is essential to achieve life goals. Buying a dream home, providing for children’s education or getting them married requires a substantial sum of money and can be achieved only if one has planned well in advance. One of the ULIP benefits is that it encourages disciplined savings and systematic investments. The mandatory 5-year lock-in period keeps you invested and ensures that a corpus is accumulated for your use. One needs to plan the duration of staying invested basis the goal for which the investment is being made in order to make the most of their ULIP plan.
3. Protection of loved ones:
Even though ULIP benefits include wealth creation, one should not forget the comprehensive protection it offers. ULIP plans guarantee death benefits which are payable in the event of the policyholder’s death. While the investment component of ULIP helps you achieve life goals, it is also important to ensure that your family continues on the path even in your absence. The collective life goal of owning a dream house or providing quality education for the children should be independent of anyone’s presence. The death benefit ensures that your family will not have to compromise with their lifestyle or modify life goals due to an unfortunate incident.
4. Potential of growing wealth:
With your savings being invested in debt or equity funds, the potential for growth with ULIP plans is relatively higher. The high growth potential is further maximized by the power of compounding over the long term. When higher returns get reinvested and grow along with the principal amount, the accumulated corpus grows at a faster rate.
5. Flexibility of investment:
It is important to have control over your money as emergency situations in life can come without a warning. A number of unique features make ULIP plans a flexible investment option. ULIP benefits include fund switching option, premium redirection, partial withdrawal and top-up facility. Fund switching allows you to change the allocation mix during the tenure of the policy according to your financial needs and market conditions. With ULIP, one can also choose to redirect future premiums to investment funds of his/her choice. The partial withdrawal feature helps you access funds in the hour of need, subject to the lock-in period. Besides fund switch and premium redirection, ULIPs allow you to top up the fund to reach your planned life goal.
6. Reward for staying invested:
Investing for the long term is a proven strategy to grow wealth over time. What if long term investing becomes more beneficial? Some ULIPs maximise the benefits of long term investing by features like Loyalty Additions and Fund Boosters. ULIP plans reward you if you stay invested for the long run. Similarly, some new age ULIPs return the mortality charges at maturity, boosting the overall returns from the policy as per the policy terms and conditions.
7. Tax Benefits:
One of the benefits of ULIPs is the tax benefits one can avail on premiums paid and maturity benefits. The premium paid towards the ULIP policies is typically exempted from taxes as per Section 80C of the Income Tax Act, 1961. Premiums deductible up to Rs. 1, 50,000 on taxable income. It also offers tax-free maturity amount as per Section 10 (10D) of the Income Tax Act 1961. The above tax benefits are subject to the provisions stated under Income Tax Act, 1961, as amended from time to time.
Who should buy ULIP?
ULIP plans cater to a wide variety of customers. To understand who should buy ULIP, one should focus on why I should invest in ULIP. Every individual has his/her own reasons to make an investment. The target audience for ULIPs can be categorized into four segments.
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People with varying risk appetite
ULIP plans have found numerous takers primarily due to the broad range of investment funds that it offers and how it can help one to achieve their Life Goals. Most ULIPs have funds consisting of equity and debt funds or a combination of both. Some ULIPs invest higher in equity funds while others invest higher in debt funds. Investors seeking relatively higher returns and are comfortable with a higher risk can invest in equity-oriented funds. On the other hand, risk-averse investors can opt for debt funds that offer more stability when compared to equity funds. Investors can also choose to distribute their savings across equity and debt funds as per their risk appetite. With a wide variety of funds, ULIP plans essentially cater to people with varying risk appetite. Before investing, one should look at the historical NAV of a fund to get an idea of what to expect in future and take a decision. You can always take advice from a subject matter expert or a life insurance consultant and plan for your Life Goals with ULIPs.
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People with a long-term investment horizon
Varieties of investment plans are available in the market. Some are targeted at short-term investors while some cater to long-term investors. ULIPs are structured to provide optimum returns for people having a long-term horizon. A ULIP plan offers a variety of equity and debt funds for investment to the policyholders. Equity and debt funds are known to generate returns in the long term. Market fluctuations can affect the value of the investment in the short term, but over a long period, equity and debt funds could deliver desirable returns on investment due to the power of compounding. Moreover, ULIP plans have a mandatory 5-year lock-in period. If the aim is to accumulate funds for long term life goals such as buying a dream house or saving up for your children’s marriage, then you can consider ULIPs as one of preferred options as it caters to the long term outlook.
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Hands-on investors
Many individuals prefer to have an active role in their investments. To self-manage the investment, one needs transparent data and the option to modify the allocation. The NAVs of all the ULIP plans are made available by the insurance companies, which makes it easier for the policyholder to evaluate and invest in the policy of his/her liking. The NAV of the ULIP funds is updated on a regular basis. Hands-on investors can use features like fund switching or premium redirection to modify their allocation and self-manage their investment as per their knowledge and expertise. Transparent data coupled with the option to modify allocations makes ULIP plans suitable for hands-on investors. ULIPs shows how much percentage in a fund is invested in a particular stock and it gives you a historic performance of the particular fund in comparison to the benchmark returns.
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Investors across life stages
People in different life stages have different needs and ULIP plans can be tinkered to cater to all. It does not matter if you are 20, 35 or 50. Whatever your age is, you are sure to have certain life goals and dreams that you hope to fulfil. You may want to complete your MBA, or perhaps you want to make a down payment on your dream home. Whatever be the reason, to be able to fund your life goals you need a corpus. You can use an investment tool such as a Unit Linked Insurance Plan, or ULIP, to help you save up the money required to achieve your Life Goals.
How to buy a suitable ULIP plan for yourself?
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Choose the ULIP investment fund as per your life goal
With ULIP plans, you get an option to choose from a number of funds. These ULIP funds invest in equity, debt or a combination of both funds. To buy a suitable ULIP plan for yourself, it is important to choose the investment fund in consonance with your life goals. Equity funds provide higher returns but also carry higher risk while debt funds offer moderate returns with lower risk. If the life goal is years away like children’s higher education then one should allocate the bulk of his/her funds to an equity-oriented fund. On the other hand, if the need of the hour is to protect the value of the accumulated corpus, like in the case of retirees, one should opt for debt funds. Choosing of funds depends entirely on an individual’s objective. One can also obtain an opinion from a subject matter expert or a life insurance consultant with respect to deciding the funds that could help him achieve their life goals.
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Choose adequate life insurance cover
While buying a ULIP policy, the focus is often on the investment component of the plan. To buy the suitable ULIP plan, it is crucial to focus on the size of the insurance cover. The investment component of a ULIP will help you achieve life goals, but the insurance cover will ensure that the life goal is achieved even in your absence. Choose the life insurance cover/ sum assured component as per your life stage depending on the lifestyle of your family.
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Opt for a longer tenure
A ULIP policy has a compulsory lock-in period of 5 years. It has been formulated to keep people invested in the policy and reap optimum benefits. Many people opt for ULIP plans with relatively short durations. ULIP plans have been designed to build wealth over the long term. Opt for a ULIP policy with a long tenure as one can gain through the power of compounding only if he/she remains invested for a long period.
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Take into account the charges and levies
Insurance companies levy various charges on ULIP plans. Some of the common ULIP charges are fund management fees, premium allocation charges, mortality charges, administration and service charges. It is important to understand all the charges properly before investing. The charges levied on a ULIP plan has an impact on the final returns of the policy. Therefore, it is critical to invest in a ULIP investment plan with lower charges.
Why should I invest in ULIP now?
While you can invest in ULIP at any stage of your life, it is advisable to invest as early as possible. Investing now will have an impact on ULIP returns over a long term.
Power of compounding
With ULIP plans, you might accumulate a considerable sum over the long run, thanks to the power of compounding. When the returns generated on the initial investment get reinvested and generate additional income over time, it is known as compounding. The longer you stay invested the stronger will be the impact of compounding. By investing at an early stage, you can ensure that your money gets sufficient time to grow. The mandatory 5 year lock-in period combined with a long-term orientation, helps ULIPs compound investors’ wealth in the long run.
Higher corpus
Investing at a young age is the key to accumulate a larger corpus as you get more time to stay invested and your risk bearing capacity is also high. When you invest later in life, you give a small time frame to the ULIP plan to compound the money. Investing early may help you in saving more money through the ULIP plan and maximise on the market-linked returns to create the required corpus to achieve your life goals. More savings and more time to compound will lead to a higher corpus for you. Compounding is simply the process to earning return over the return already earned on the initial investment; hence, you can experience the magic of compounding after you have remained invested for a long term in your ULIP policy.
Higher risk appetite
One of the benefits of being young is reduced level of responsibilities. When there are fewer responsibilities, one can save a higher proportion of his/her income and take bolder investment decisions. The risk tolerance of youngsters is higher in comparison to older people. An individual with higher risk appetite can invest the bulk of his savings in equity-oriented ULIP funds. Investing in an equity fund may give higher returns but will also expose you to market volatility. It is easier to tolerate the market fluctuations when you do not have many responsibilities as it has been observed over long periods equity markets always deliver positive returns. Moreover, the ULIP fund switching option allows you to reduce exposure to equity and switch to a more stable fund like debt fund during market turbulence.
Systematic savings
ULIP inculcates a habit of systematic saving at a young age. When you start saving systematically at a young age, it reduces the need to contribute large sums in future to achieve life goals. With employment opportunities available at a young age, it is easy to make systematic contributions for your life goals at the beginning of the career. One of the advantages of starting early is being on the right side of the clock. Investing at a young age helps you achieve your life goals comfortably.
Myths & realities of investing in a ULIP policy
ULIPs are unique products that provide dual benefits of investment and protection. The uniqueness has, however, led to several myths and misconceptions.
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Myth 1 - ULIP plans are expensive
Reality - According to popular perception that has been alive over the years, ULIPs are expensive. However, is the perception based on objective facts or is it a misconception? There are various ULIP charges like premium allocation charge and fund management charge. These levies used to affect ULIP returns considerably. However, certain customer-friendly regulations introduced by the Insurance Regulatory and Development Authority of India a decade ago have brought several positive changes. The changes brought by the insurance regulator has improved the ULIPs and reduced investment costs.
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Myth 2 - ULIPs are risky
Reality - A popular myth associated with ULIPs is that they are risky investment options. The root of the myth lies in the misconception that ULIPs only invest in equity. Many people hesitate to invest in ULIPs thinking that their money will be invested in equity markets, which are considered volatile and riskier. The reality is completely different. Along with equity, ULIPs offer the option to invest in debt or mix of equity and debt funds. Investors with higher risk tolerance can opt for equity funds, while risk-averse investors can choose to invest in debt funds. One can also distribute his/her funds across equity and debt funds. With a ULIP policy, you can also switch between funds according to changing financial needs or evolving market conditions to suit your needs.
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Myth 3 - Market volatility affects life cover
Reality - A ULIP policy allows you to invest your savings into equity and debt funds or a combination of both while simultaneously enjoying the benefits of life insurance cover. The returns in a ULIP policy depends on the performance of the underlying fund(s). Many people believe that the performance of the funds will have an impact on the sum assured under a ULIP policy. The death benefits guaranteed under a ULIP policy are not affected by the volatility in the market.
Eligibility criteria and documents required to buy a ULIP policy
Buying a Bajaj Allianz Life ULIP plan is very convenient and simple. The minimum entry age for buying a ULIP is 18 years. Even a new born can be covered under a ULIP policy. The documents you would need to buy a ULIP plan include identify proof, age proof, address proof and a recent photographs. Eligibility criteria could defer with respect to the ULIP plans selected hence it is always advisable to go through the product terms and conditions to understand the facts.
Types of ULIPs
The primary purpose of all ULIP plans is to help you accumulate funds while enjoying the protection of life cover. However, it is important to take your financial objectives into consideration before opting for a ULIP. Depending on your needs, you can choose from different types of ULIPs. Broadly, ULIP plans can be categorized into two—goal-oriented ULIPs and retirement-oriented ULIPs.
Goal-oriented ULIPs
It is natural for human beings to have desires. Some of the common desires like owning a home or buying a car turn into life goals once you start earning. Life goals can be achieved only through disciplined investing. Different types of ULIP plans are designed to help people stay on the path to achieve their life goals. Life goal-oriented ULIP plans have different investment strategies to cater to people with different life goals. Some of the benefits are:
- Many ULIP plans offer the return of mortality charges at the end of the tenure of the policy. Investors get back all the charges paid for the life cover throughout the policy term at maturity.
- If your life goals require staggered payments, opt for a ULIP plan that allows the payment of the maturity amount in instalments. Some ULIPs pay out the accumulated corpus in instalments over a period of time, subject to policy terms and conditions.
- Life goals can change. ULIPs policies take into account the investor’s changing needs and allow you to modify the premium payment term as well as the sum assured during the tenure of the policy.
- ULIPs are long-term investment products. One can get the maximum benefit from a ULIP plan by staying invested for the long term. To maximise the value of long-term investors, many ULIPs offer loyalty additions for staying invested for a specific number of years. Loyalty additions help in improving returns for the policyholder.
- Similar to loyalty additions, some ULIPs provide the facility of fund booster. If the ULIP policy is of ten years or above, fund boosters are added to regular premiums. It leads to increased returns.
Retirement-oriented ULIPs
Most people spend the prime years of their life working and ensuring the wellbeing of their families. Retirement is the phase they look forward to achieving life goals such as travelling or pursuing other hobbies. While there are other types of ULIPs, a retirement-focused ULIP can help you achieve certain life goals after retirement. Some of the defining features of retirement-oriented ULIPs are:
- It provides a steady flow of income to help you achieve all the retirement goals.
- Retirement ULIPs ensure coverage for the entire life of the policyholder. The life insurance remains active until 99 or 100 years of age. The whole life cover option with ULIPs is optional and not a universal feature of all retirement-focused ULIPs.
- With an insurance cover for the entire life, such ULIP plans may also offer income until the age of 99 years, depending on the terms and conditions of the policy.
- It may offer facilities like the return of life coverage charges and loyalty additions.
- Retirement-focused ULIPs offer various investment strategies which help the investor modify allocations as per his/her risk profile and life stage.
- To invest in a retirement-oriented ULIP plan, one must be of 18 years of age. However, the maximum age for investment ranges between 65 years and 80 years.
Income tax benefits of investing in a ULIP policy
ULIP plans offer a host of benefits. Policyholders can enjoy the benefits of life insurance along with ULIP market-linked returns. Additionally, there are a number of ULIP tax benefits. Investing in a ULIP plan can help you reduce your annual income tax liability.
1. Tax deduction:
The premiums paid for ULIP plans are eligible for a tax deduction of up to Rs 1.5 lakh annually under Section 80C of the Income Tax Act, 1961, subject to provisions stated therein.
2. No long-term capital gains tax:
After the Union Budget 2018, several financial products were brought under the umbrella of the capital gains tax. ULIPs are the only financial products that offer market-linked returns that do not attract the long-term capital gains tax on the returns.
3. Tax exemption:
The maturity benefit or the death benefit received through a ULIP plan are exempt from income tax under Section 10 (10D) of the income tax law, subject to the fulfilment of certain conditions. Here too the conditions are similar to those for availing tax deductions u/s 80C. For ULIP plans purchased after April 1, 2012, the annual premium should be less than or equal to 10 per cent of the sum assured for the entire term. For ULIP plans purchased before April 1, 2012, the annual premium should be less than or equal to 20 per cent of the sum assured for the entire term. In case there is a pay-out due to demise of the policyholder during the policy period, the death benefit is tax-free too.
4. Tax-efficient switching between funds:
ULIP plans provide you with the option to invest in a variety of funds. Investors can also switch between equity and debt funds without worrying about tax liabilities.
Reasons why ULIPs can help you save for the long term
With a rapidly changing world around us, it is critical to invest in products that align with your financial goals. A number of features make ULIPs an efficient medium to save for the long term.
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Lock-in period
ULIP plans have a mandatory lock-in period of five years. Even partial withdrawals are allowed only after the lock-in period gets over. The lock-in period inculcates a habit of systematic saving among investors. The lock-in period coupled with market-linked returns nudges policyholders to remain invested for the long term helping them save for their future financial needs.
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Offers market linked returns
Any financial product designed for the long term will help you accumulate wealth gradually over several years. The rate of wealth creation of such products is generally higher than short-term investment options. With exposure to equity markets, ULIP plans are designed to generate wealth in the long term. Moreover, remaining invested for a longer period of time multiplies wealth at a faster rate due to the power of compounding.
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Fund switch
The option to switch between funds provided by ULIPs makes them one of the preferred option to save for the long term. The financial needs of the family change over time and it requires an alteration in fund allocation. With the fund switching option of ULIP plans, you can switch between equity and debt funds to better align the portfolio with your financial goals.
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Dual benefits
ULIP plans offer dual benefits of insurance with investment. By investing in ULIP, you not only save for your life goals but also protect your family from any unforeseen circumstances. On one hand, you create wealth and on the other ensure financial protection for your loved ones.
Steps to buy ULIP plans – Online and Offline
ULIPs have become a popular investment option. One can buy a ULIP plan through the traditional offline channel as well as online.
Online Renewal
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1To buy a ULIP plan online, go to www.bajajallianzlife.com
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2Go to the ULIP section on the website and choose the ULIP plan or ULIP policy of your choice.
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3Click on invest now to proceed to the buy journey.
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4Provide personal information details like name, mobile number, gender, date of birth, pin code, etc.
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5After personal details, you will have to provide investment details like PT,PPT, Investment amount, investment strategy and fund allocation basis your preference.
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6Thereafter follow the necessary steps and complete the process.
Offline Renewal
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1To buy a ULIP plan offline, visit the nearest branch or get in touch with an agent
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2You will have to fill up the proposal form and pay the first premium.
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3The personnel at the branch or the agent will help you through the process.
How Bajaj Allianz Life's ULIP calculator helps you plan your life goals
ULIPs provide life insurance cover as well as help accumulate wealth for the long term. Investing in ULIPs requires a clear understanding of your needs. The size of the insurance coverage or sum assured varies according to the life stage of the policyholder. Similarly, everyone has different investment needs. The premium to be paid and the time required to achieve financial goals depends on the life goal and the life insurance cover of the individual. The ULIP calculator from Bajaj Allianz Life helps you get an idea of the amount you will have to pay in four simple steps –
Step 1
It asks you for the amount needed to achieve the life goal.
Step 2
You then provide the expected duration of your investment.
Step 3
Next, you enter the division of the funds between risk-free and market-linked instruments.
Step 4
The ULIP calculator will then ask you about the expected rate of return from risk-free instruments and market-linked instruments, respectively that you would expect.
ULIP checklist - Things to consider before investing in a ULIP
ULIPs do not just provide insurance cover; they are also an investment instrument to achieve life goals. Every aspect of a ULIP policy should be properly understood before investing. Here are some of the important points to consider before investing in ULIPs.
Research thoroughly
Conduct thorough research before investing. It is advisable to have a clear idea of the structure and functioning of ULIP plans before investing.
Know your ULIP’s charges
A factor often ignored by many investors is the cost of the investment. While investing in ULIP, take into account the various charges levied by the insurer.
Identify your financial goals
The most important factor to consider before investing in a ULIP plan is the financial goal i.e. how much corpus would you require to get your life goals done. The aim should be to opt for a ULIP policy that is most-suited to help you achieve your planned life goal.
Check your ULIP’s historical performance
Evaluate the past performance of ULIP investment funds. Their performance can be compared to benchmark indices like Nifty 50 and Sensex.
ULIP lock-in period
ULIPs are designed to create wealth in the long run. To ensure that policyholder’s stay invested and gain from ULIPs’ long-term orientation, the insurance regulatory authority introduced a lock-in period of 5 years. It essentially means that policyholders cannot withdraw or liquidate the accumulated fund before 5 years after investing. If a policyholder discontinues his/her policy within the lock-in period, the insurer transfers the accumulated money to a fund earmarked for discontinued policies. The policyholder gets access to fund only after the lock-in period even in the case of discontinuance. Partial withdrawals are also allowed only after the expiry of lock-in period.
ULIP charges
Every financial product has certain charges associated with them and ULIP plans are no different. Here are the major ULIP charges.
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1. Premium allocation charges
The premium allocation charge is levied by the insurer to cover the initial expenses of issuing the policy.
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2. Policy administration charge
The insurance company levies the policy administration charge to recoup the expenses of maintaining the policy.
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3. Surrender charges
The insurer levies the surrender charge if the policyholder opts to liquidate the accumulated fund before the maturity date. It is generally charged as a percentage of the accumulated fund or the premium.
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4. Mortality charge
The mortality charge is levied by the insurance company to cover the expense of providing the life cover. It varies according to the age of the life assured and the sum assured. The mortality charge is generally deducted on a monthly basis.
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5. Fund management charges
ULIP plans invest the accumulated funds into equity and debt. Policyholders have the option to opt for specific equity or debt fund. Professional money managers handle the investment funds and the fund management charges cover their fees. The charge varies according to the fund and the plan and is linked to the net asset value.
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6. Fund switching charges
ULIPs provide adequate flexibility to investors. Policyholders can switch between funds as per their financial goals and market conditions. A number of fund switches in a year are free of charge, but after that, a fund switching charge has to be paid.
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7. Discontinuance charge:
If you discontinue your ULIP policy within the mandatory five-year lock-in period, the insurer will charge a small fee, known as discontinuance charge.
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8. Partial withdrawal charge
Most ULIP plans allow partial withdrawals of lump-sum amounts after the compulsory lock-in period. The insurance company levies a fee for the withdrawals, known as partial withdrawal charge.
Types of ULIP funds
A wide variety of investors opt for ULIPs, primarily due to the flexibility it offers. Policyholders can invest in a number of ULIP funds as per their risk tolerance, financial goal and investment horizon. ULIPs offer a number of fund options to policyholders ranging from equity and debt to cash funds.
Equity funds (High Risk):
If you opt for equity funds, a major portion of the premium will be invested in stocks of listed companies. The professional fund manager backed by a research team identifies the best companies to invest. Depending on the size of the companies in the holding, equity funds are classified into small-cap, mid-cap or large-cap funds. The exposure to equity of an equity fund can range from 20% or lower to 70% and higher depending on the terms and conditions of the insurer. Equity funds are more suitable for investors with high-risk tolerance.
Fixed income or bond funds (Medium Risk):
These ULIP funds invest in instruments that offer fixed income. The bulk of the premium is invested in government bonds, corporate bonds or fixed-income bonds. Bond funds are considered to be more stable than equity funds and are suitable for risk-averse policyholders. These funds are more aligned with long-term investments.
Cash/liquid funds (Low Risk):
As the name suggests, cash funds invest a major portion of the premiums into liquid instruments. These include cash or bank deposits, cash equivalent instruments, money market instruments or short-term debt funds with high credit ratings. The risk associated with cash funds is low, but the returns are also low. Cash funds are suitable for extremely risk-averse investors.
Which ULIP Fund Should You Invest In?
ULIP investment funds have been designed in line with the type of investors.
Equity funds:
The bulk of your premiums is invested in stocks of listed companies. Professional analysts identify the best stocks with the help of research teams and the funds are allocated accordingly. Depending on the size of the companies, the fund can be categorized into small-cap, mid-cap and large-cap. Equity funds are relatively riskier and are suitable for aggressive investors seeking growth.
Fixed income funds:
These funds primarily invest in debt instruments like government bonds, corporate bonds and fixed income instruments. Fixed income funds or debt funds are relatively stable and are more suited for risk-averse investors. Debt funds are considered to be medium-risk investments.
Liquid funds:
The bulk of your premiums are invested in liquid instruments like cash and bank deposits, cash equivalent securities, money market instruments and short-term debt instruments with high credit rating. Liquid funds or cash funds offer low returns and are suitable for extremely conservative investors.
Portfolio Strategies Offered By Bajaj Allianz Life
Besides the different types of investment funds that help you invest according to your risk profile, Bajaj Allianz Life ULIP plans offer the following fund portfolio management strategies -
Wheel of life strategy:
The appetite for risk changes with age. When you are young, you have a higher risk tolerance, which gradually decreases with age. The wheel of life portfolio management strategy offered by ULIPs starts with more weightage to high return but riskier assets, but shifts allocation towards more stable assets towards maturity. The allocation is equity-heavy at the start of the policy but changes to fixed income funds gradually to de-risk your portfolio. The strategy ensures that you receive stable returns at maturity even if market conditions deteriorate. The wheel of life strategy is favourable for people with long-term goals like children’s education or buying a house.
Auto transfer portfolio strategy:
The auto-transfer portfolio strategy is a systematic investment plan through which you can earn stable returns with moderate risk. This strategy invests your entire premium in low-risk bond funds or liquid funds. However, at the start of every month, a pre-decided proportion of the premiums is diverted to other high-risk funds of your choice. The auto-transfer strategy improves overall returns while ensuring stable growth.
Trigger-based portfolio strategy:
The trigger-based portfolio strategy focuses on the protection of wealth through diversification. The initial allocation is in pre-determined equity and debt funds at a ratio of 3:1. The proportion gets modified depending on market movements. A rise of over 15% in the NAV of the equity fund is considered to be a trigger event. At the trigger event the excess in 3 times in equity fund is moved to liquid and the original proportion of 3:1 is maintained.
Investor selectable portfolio strategy:
The investor selectable portfolio strategy gives complete authority to policyholders to invest according to their risk profile. Under the strategy, you can choose the funds to invest and switch between them. One can choose to invest completely in an equity fund or a debt fund or distribute the premiums between multiple funds. The investment selectable strategy even allows you to specify the fund in the event of partial withdrawals.
ULIP NAV explained
ULIPs provide long-term wealth creation along with insurance cover. ULIPs ensure wealth by investing in market-linked instruments like debt, equity or cash equivalent funds. Every ULIP plan offers a wide array of ULIP funds and each fund holds underlying equity, debt or cash assets.
The NAV or the Net Asset Value is a critical metric to gauge the performance of a fund. The NAV is defined as the total value of the assets held by a fund after deducting all the liabilities. The value of the fund’s current assets and any accrued income is taken to calculate the assets. The liabilities deducted to get the NAV are expenses like fund management charge, provisions, current liabilities and service charge. ULIP NAV can be easily found on the website of the insurer.
In common usage, people consider the per unit NAV. One can get the NAV per unit by dividing the NAV of a fund by the total units of the fund. According to the guidelines of the insurance regulator, the valuation of equity holdings is determined on the basis of the closing price of the stock on the National Stock Exchange. If the stock is not listed on the NSE, the share price on the BSE is taken. The NSE is the primary exchange and BSE the secondary exchange for calculating ULIP NAV.
Policyholders are allotted units of each fund on the basis of their investment. The NAV of each unit is declared on a daily basis by the insurance company. The NAV has to be taken into account to determine the returns generated by a ULIP fund.
ULIP fund switching feature explained
There are multiple ULIP fund options before investors. You can invest in an equity fund or a debt fund depending on your risk tolerance, investment objective and investment duration. ULIP plans are long-term investment options, but financial goals can change over the years. What options do investors have if the initial fund allocation pattern does not match new financial goals? The fund switching option is offered for such situations. Through the fund switching option, you can switch between ULIP funds, essentially rearranging the fund allocation. Insurance companies allow a certain number of free fund switches in a year. BALIC gives unlimited free switches in its new-age ULIP plans.
How to file a claim for your ULIP plan
ULIP plans provide death benefits as well as maturity benefits. In the event of the death of the policyholder during the policy tenure, the policy pays the death benefit to the nominee.
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To file the claim for your ULIP plan, send a formal communication about the death of the life assured to the insurance company.
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A claim form has to be submitted with the relevant documents. The form asks for basic details like the name of the life assured the reason of death and the name of the claimant.
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Along with the claim form, the claimant has to provide the original policy document, copies of the death certificate, identity and address proof, police FIR in the case of accidental death and medical records in the event of death due to illness.
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The insurer has to seek clarification within 15 days and settle the claim within 30 days of receiving all the documents. In case of additional investigation, the claim has to be settled within 120 days. For delay in settlement, the insurance company is liable to pay penal interest.
How to withdraw from your ULIP?
ULIPs have become a preferred investment option due to the flexibility it offers. One of the key features of a ULIP policy is the partial withdrawal option. Through the facility, you can withdraw lump-sum amounts from the accumulated fund. ULIP plans are a long-term investment option and the withdrawal option can only be exercised five years after the issuance of the ULIP policy. All ULIP policies have a five-year compulsory lock-in period. Partial withdrawal, however, affects the accumulated funds and the sum assured. Therefore, it is advisable to withdraw only in emergency situations.
With the advent of online ULIP policies, insurance companies have simplified the process of withdrawals. The request for partial withdrawals can be submitted online.
Why choose Bajaj Allianz Life ULIP plans
ULIPs are an insurance product that also offers an investment option. People invest in an insurance product to protect their loved ones in their absence. For the well-being of your family, it is important to opt for a credible insurer. Bajaj Allianz Life ULIP plans offer a host of unique advantages that include the product as well as the company.
Credibility
Bajaj Allianz Life is one of the leading private life insurance company in India. The company is a partnership between two powerful and successful entities in their own right - Bajaj Finserv Ltd, one of India’s most diversified non-banking financial institution and Allianz SE, one of the world’s leading asset managers and insurer.
Claim settlement ratio
Before buying a ULIP plan, it is crucial to ensure that the insurance company will honour its promise in your absence. If your family’s claim is rejected, it will defeat the purpose of buying a ULIP insurance plan. The claim settlement ratio is a critical metric that throws light on the insurance company’s claim settlement record. It is the ratio of the number of claims accepted by the insurer versus the total number of claims filed in a year. Bajaj Allianz Life has a stellar claim settlement ratio of 98.02%~ for FY 19-20.
Multiple options
Bajaj Allianz Life offers a host of ULIP plans catering to a wide variety of customers. You can choose from eight different ULIP plans according to your financial objectives and plan to achieve your Life Goals.
Assets under management (AUM)
Bajaj Allianz Life holds Rs.70,295** AUM.
Extensive distribution channel
Bajaj Allianz Life has set up an extensive network of branch offices and agents. The company serves millions of customers through 511 branches and over 80,000+ agents (as on 31 December 2020). Along with the physical network, you can also buy Bajaj Allianz Life ULIP plans online from the comfort of your home by logging on to www.bajajallianzlife.com
~Individual Claims Settlement Ratio for FY 2019-2020 | **All figures as on 31 December, 2020
ULIP plans from Bajaj Allianz Life
Bajaj Allianz Life offers a host of ULIP plans# to help you achieve your Life Goals.
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Bajaj Allianz Life LongLife Goal - A Unit-Linked Non-Participating Whole Life Insurance Plan
A flexible ULIP plan that offers insurance cover for the entire life. One can opt for retired life income to meet retirement goals. One can enjoy higher returns through loyalty additions. Policyholders can choose from four investment portfolio strategies and eight investment funds. The ULIP policy can be bought online.
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Bajaj Allianz Life Goal Assure - A Unit-linked Non-Participating Life Insurance Plan
A non-participating ULIP designed to help you achieve life goals. Offers loyalty additions from the sixth year onwards and fund booster at the time of maturity. The ULIP policy returns the mortality charges at the end of the tenure maximizing returns. Investors can choose from four portfolio management strategies and eight investment funds. The ULIP plan also provides the option between regular and limited premium payment terms. The policy can be bought online.
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Bajaj Allianz Future Gain - A Unit-Linked Endowment Insurance Plan
The ULIP offers low premium allocation charges for premium above Rs. 2 Lakhs and hence the maximum amount of premium is invested. Policyholders can enhance the coverage of the policy through riders for accidental death, accidental permanent total or partial disability and critical illness at a nominal extra cost. The premium payment term of the policy can be increased anytime during the tenure. Investors can choose between two portfolio management strategies and seven investment funds. The policy can be bought online.
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Bajaj Allianz Fortune Gain - A Unit-linked Non-participating Life Insurance Plan
A non-participating ULIP plan with the option of up to 99.5% fund allocation for premium of Rs. 10 lakhs & above. The policy offers loyalty additions that boost overall returns. Policyholders can choose from seven investment funds. The policy offers unlimited free fund switches and systematic switching options. Policyholders can choose to receive the maturity benefits in instalments. The policy can be bought online.
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Bajaj Allianz Life Future Wealth Gain - A Unit-Linked Endowment Life Insurance Plan
A non-participating ULIP that offers a number of benefits. A percentage of the annual premium is added to the fund value at maturity as fund booster. Policyholders can choose from two portfolio management strategies. Investors can enhance life insurance cover through riders at a nominal extra cost.
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Bajaj Allianz Life Goal Based Saving - A new age ULIP with Return of life cover charges
A new age ULIP with the return of mortality charges. Policyholders can choose between regular, limited and single premium payment options. The ULIP policy provides the option to choose from eight funds. One can also withdraw lump-sum amounts from the accumulated fund in case of emergency through partial withdrawal option.
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Bajaj Allianz Life Principal Gain - A Guaranteed Maturity Unit-linked Insurance Plan
A guaranteed maturity ULIP plan with the potential of high returns. The policy guaranteed loyalty additions. Investors can also opt to receive maturity benefits in instalments.
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Bajaj Allianz Retire Rich - A Unit-linked Pension Plan
Bajaj Allianz Retire Rich, a unit-linked deferred pension plan, helps you invest and secure your post-retirement life goals. This retirement benefit plan helps you leverage the advantages of investing in a market-linked fund, to create a corpus, which is utilized to generate regular income during your retired years.
#For more details on the above-mentioned products, please refer their respective sales literature available on the Company’s website.
How to plan for a ULIP investment as per your risk appetite
ULIPs are complex products that offer insurance with investment. The investors’ money is invested in equity, debt or a combination of both funds. The performance of the investment fund has a bearing on the life goals of the policyholder. The ULIP fund should be chosen after taking into account the risk tolerance, financial objective and the investment duration. The financial objective and investment duration can be easily ascertained, but determining risk appetite can be tricky. To understand how to make ULIP investment as per your risk appetite, it is important to know the type of risk appetite that suits you.
Aggressive (High Risk)
Investors who largely invest in equities or high-risk stocks are aggressive investors. These people follow a high-risk high reward strategy. The main objective here is capital appreciation.
Moderate (Medium Risk)
Contrary to the aggressive category, the funds are invested in corporate bonds, government securities or fixed-income instruments. The risk is considerably lower than the aggressive category.
Balanced (Medium to High Risk)
The most stable of the lot, these ULIPs combine equity investment with fixed interest instruments. The total investible amount is distributed between high-risk equities, such as company stocks, and lower-risk, fixed-income instruments.
Conservative (Low Risk)
The bond markets are not as volatile as equity markets, but the bond prices change on a daily basis. Some people have extremely low-risk tolerance and they deem moderate risk appetite to be too risky. The funds of conservative investors are largely invested in cash, bank deposits or cash equivalent instruments. The risk is extremely low and so are the returns.
Read More ULIP Articles On Bajaj Allianz Life Insurance Guide
ULIP Meaning - What is ULIP Policy?
It doesn't matter if your 20, 35 or 50. Whatever your age, you are sure to have certain life goals and dreams that you hope to fulfil.
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Top Performing ULIP Funds Explained
Unit Linked Insurance Plans (ULIPs) provide the dual benefit of insurance cover and wealth creation to its investors.
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ULIP Performance - Why You Should Monitor Your ULIP Regularly
When it comes to investment, a majority of people look around to invest in a Unit Linked Insurance Plan (ULIP).
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Frequently Asked Questions On ULIP Plans
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Are deaths due to COVID-19 covered by Bajaj Allianz Life ULIP Plans?
ULIP plans are life insurance policies and health-related deaths are covered under life insurance plans. Therefore, deaths due to Covid-19^ are covered by Bajaj Allianz Life ULIP plans. In the event of the death of a policyholder due to Covid-19, his/her nominees will receive the sum assured.
^Our policy covers COVID 19 claims subject to policy terms and conditions being met.
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What is the full form of ULIP?
The full form of ULIP is Unit Linked Insurance Plan and they provide the dual benefit of life insurance and investment.
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Is ULIP a good investment?
ULIPs provide insurance cover along with market linked returns. ULIPs are flexible, allowing investors to make partial withdrawals or switch funds. There are a variety of ULIP funds for investors to choose from. ULIP caters to a wide variety of investors. Risk-averse investors can invest in a debt fund while people with higher risk tolerance can invest in equity funds.
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Why Do I Need ULIP In My Investment Portfolio?
ULIPs can be aligned with your life goals - ULIPs are one of the preferred investment tool to help you meet your long-term dreams and aspirations. You can opt for a ULIP plan based on your risk appetite, life circumstances, life goal and the time frame in which you want to achieve them.
Dual benefit of investment and protection - A ULIP plan provides the winning combination of wealth creation and protection. Life cover means that your family is able to pursue their life goals even in your absence. On the other hand your investment portfolio may help you accumulate the required corpus for achieving your life goals.
Flexibility to meet your unique requirements - In a ULIP plan, you can choose between equity, debt o or a combination of them depending on your risk appetite and the timeline of your life goals.
Switch funds as per your requirement - You have the freedom to switch between equity or debt funds available under the ULIP plan opted by you, based on market performance, your risk appetite and your financial goals to optimize your return.
Lesser charges involved - Charges in new age ULIPs are spread over the tenure of the policy. Fund Management Charge (FMC) in ULIPs is capped at 1.35%, by the IRDA. Other charges like policy administration charge and premium allocation charge have reduced significantly over the years.
Tax savings - You can avail deductions up to Rs. 1.5 lakhs against your taxable income for the premiums paid towards a ULIP plan, under Section 80C of the Income Tax Act, 1961. The maturity benefit and death benefit amount is also exempted from Income Tax under Section 10(10D) of the Income Tax Act, 1961, subject to fulfilment of specified conditions. Further, ULIPs are the only equity-linked investment product exempted from Long-Term Capital Gain Tax (LTCG). It also offers you hassle free and tax efficient switching from equity to debt and vice-versa.
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How do I choose my preferred ULIP?
A key advantage of choosing a ULIP is that you can customize it as per your unique financial goals. The following factors will help you zero in on the preferred ULIP:
Go for a plan basis the past fund performance - The primary reason for investment is to get the best possible return so that you can achieve your life goals and meet your financial commitments. So, before choosing a ULIP plan analyse its past fund performance. The past fund performance will give you an indication of the kind of returns you can expect from your investment, even though past performance is not indicative of future performance
Opt for more fund options for better asset allocation- Opt for a ULIP plan, which offers a wide range of funds for asset allocation. A diverse portfolio of funds helps you in better allocation of your assets and brings down your risk.
Less Charges = More Gain - The new-age ULIPs with minimal charges will invest the maximum part of your assets, thus enhancing returns and helping you attain your financial goals.
More premium payment options for convenience -A ULIP plan usually comes as a single premium plan, limited premium plan or a regular premium plan. You can opt for one that suits your requirement and financial situation.
Opt for a plan with maximum free switches - One of the significant benefits of a ULIP plan is the option of moving between debt or equity funds. Fund switching feature enables you to take advantage of market volatility by switching from one type of fund to another as per your needs and risk appetite. Go for a plan, which allows a maximum number of free switches.
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What is the difference between Sum Assured and Maturity Benefit in a ULIP?
ULIPs offer dual benefits of insurance and investment. Policyholders can invest in equity and debt funds or a mix of both through ULIPs. The accumulated fund value is paid to the policyholder if he/she outlives the policy. It is known as the maturity benefit. The sum assured is the amount that the nominee will get in the event of the life assured’s death during the term of the policy. ULIP policies being an insurance plan have a guaranteed sum assured as death benefit subject to policy terms and conditions.
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Can I increase or decrease my Sum Assured amount during the ULIP policy term?
Yes, some ULIP plans allow policyholders to increase or decrease the sum assured. Generally, insurance companies allow the modification of the sum assured after a certain period subject to policy terms and conditions.
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At my ULIP policy's maturity, what amount will I receive?
The maturity amount of a ULIP policy depends on the performance of the investment fund. When a person buys a ULIP policy, he/she has to choose a fund or multiple funds to invest his/her money. Policyholders can switch between funds during the tenure of the policy. The accumulated fund value is paid at maturity.
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Is maturity benefit of ULIP taxable?
ULIP plans offer a number of tax benefits. The premiums are eligible for a tax deduction while the maturity and death benefits are exempt from income tax. The maturity benefit of ULIPs are exempt from income tax under Section 10 (10D) of the Income Tax Act, 1961, subject to provisions stated therein.
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How can I track my ULIP fund value?
To maintain the transparency of ULIP plans, insurers provide the net asset value of the funds on a regular basis. The historical NAV of investment funds can also be accessed through the website of the insurer.
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Can I switch between different ULIP funds?
ULIP investors can choose between equity, debt and liquid funds. The investment funds are chosen based on the objective, risk tolerance and investment duration. The policyholder can switch between the ULIP funds whenever he/she wants. A certain number for fund switches in a year are free. BALIC provides unlimited free switches in its new-age plans.
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What is ULIP NAV?
NAV or Net Asset Value of a ULIP is the value of each unit of the fund on any given day.
The formula used to calculate the NAV is as follows:
NAV = (Value of Current Assets + Market Value of Investments Held) – (Value of Current Liabilities & Provisions) / Total number of outstanding units on date.
You can visit the website of your insurance provider and use NAV to determine the history of the fund performance and also to compare it with other funds. -
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How can I check my ULIP NAV?
The ULIP NAV can be checked through the insurer’s website. The NAV of each fund is declared on a daily basis by the insurance company. The NAV is an important metric that helps in calculating the returns from a ULIP plan.
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Can I surrender my ULIP during the lock-in period?
ULIP plans are long-term investment options. To derive maximum benefits from a ULIP plan, one has to remain invested for the complete tenure. To ensure optimum returns for policyholders, ULIPs have a mandatory lock-in 5 years. You can surrender the policy in the lock-in period, but the accumulated funds will be disbursed only after the lock-in period gets over.
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How is ULIP different from traditional life insurance like term plans?
Though ULIP is an insurance product, it also provides investment benefits. The biggest difference between ULIP and traditional insurance plans is the market-linked returns offered by ULIPs. Traditional plans like term insurance do not have an investment component, but even the plans that have, do not offer market-linked returns.
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Before submitting a ULIP proposal form, what sections should I double-check?
Before submitting the ULIP proposal form, it is important to check certain points like any charges mentioned in the policy. You should also check any features, benefits, exclusions and limitations mentioned in the policy. Along with these, read the section on policy lapse and associated disadvantages. Check for any other disclosures.
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Under what conditions can my ULIP policy get terminated?
Your ULIP policy will get immediately terminated
1) Policy foreclosure
2) the date on which the insurance company receives the information of the policyholder’s death
3) on the date of maturity
4) Expiry of settlement
5) Cancelation of the policy during the free-look period
6) on the payment of surrender benefits or discontinuance value to the policyholder.
Each product has their own individual terms and conditions, hence it is important to go through them.
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