What is a Unit Linked Insurance Plan?

Every Individual has certain goals in life and most of them are related to fulfilling your family's dreams and ensuring that they get the best of everything you can provide.
Your working years are the most important years in your life where you work for providing financial protection to your loved ones and to create wealth for a bright future. One needs to have a perfect life goal plan that provides for these needs. What could be better than to fulfill both these key needs with a single plan – and Yes! You have your answer right in front of you – a ULIP plan

A ULIP gives you a life cover that protects your family while also giving you an opportunity to invest in burgeoning equity markets so you can grow your money to meet your future financial goals. Thus a ULIP provides you the dual benefits of protection and growth. When you invest in a ULIP, you protect your family from the consequences of living without you or your income – today, tomorrow and for all days to come.

ULIPs are also one of the most flexible protection and investment instruments available today. They offer quarterly and yearly premium payment options and you can opt for the frequency as per your requirement. This allows you to participate in the equity markets at a minimal cost while keeping your life goals secured and family protected.

A ULIP ensures all your financial goals are met, whether it's saving for an emergency fund, planning for retirement, or protecting your family's financial future.

Why should you invest in a Unit Linked Insurance Plan?

Here are four reasons why you should invest in a ULIP plan today!

1. Maximizing your investment
Unit Linked Insurance Plans (ULIPs) allow you to invest in burgeoning equity markets. Given the kind of performance equities have provided in the recent past, considering ULIPs as an investment option becomes even more attractive.
2. Returns
Given ULIPs' performance in the recent past, they offer good returns depending on the fund you have invested in. Also ULIPs provide for Tax benefits under the Income Tax Act, 1961.
3. Loyalty additions
ULIPs from leading insurance providers also provide you loyalty additions when you stay invested for a certain period of time. This further adds to your final savings amount.
4. Life cover
In addition to all of the above points, a Unit Linked Insurance Plan (ULIP) also provides you a life cover. This is usually the sum insured or the market value of the investment (fund value), whichever is higher. This ensures that the dream goals of your family are fulfilled even if you aren't around to do so yourself.

Bajaj Allianz Life Insurance Products

Investment Plan
Goal Assure
A life goal based investment plan (ULIP) that gives you the opportunity to plan... Know more
Investment Plan
Future Gain
Maximum premium allocation to make sure that your valuable money is fully utilized towards... Know more
Investment Plan
Fortune Gain
Bajaj Allianz Fortune Gain is a non-participating, premium Unit-Linked endowment plan... Know more
Investment Plan
Principal Gain
Bajaj Allianz Life Principal Gain, a guaranteed maturity unit linked insurance plan that has been... Know more
Investment Plan
Future Wealth Gain
To realize your families long term financial goals, you need to carefully plan keeping in mind... Know more

The Income Tax
of ULIPs

While the low charges of our Unit Linked Insurance Plans (ULIPs) make them attractive, the main advantage is the seamless and tax-efficient transfer from debt to equity funds, and vice versa. This switching may be for varied reasons, including rebalancing the portfolio or even timing the markets by savvy investors.

A ULIP also provides the insured person the benefit of tax savings and exemptions!

Under Section 80C of the Income Tax Act, 1961, the premiums paid towards your ULIP allow you deductions of up to Rs. 1, 50,000 against your taxable income.

What's more is that the maturity benefit under ULIPs are exempt from taxation under Section 10(10D) of the Income Tax Act, 1961.

of buying a ULIP online
from Bajaj Allianz Life Insurance
  1. Bajaj Allianz Life online ULIP plans offer the benefits of both life insurance and market-linked returns.
  2. The cover amount of our ULIP plans is the sum insured or the market value of the investment, whichever is higher.
  3. Our ULIP plans offer an option to pay top-up premium.
  4. As maturity benefit, you will get the regular premium fund value plus top up premium fund value, provided the policy is in-force.
  5. You also have the option to alter premium payment frequency
  6. Option to take maturity benefit in installments (Settlement Option)
  7. Option to make partial withdrawals if you need funds during the Policy term
  8. Option to add additional cover to your base policy through Riders that provides additional benefits to the policyholder at a nominal cost
  • A ULIP offers life cover.
  • Unlike Mutual funds, which is a pure investment tool, ULIPs offer both life insurance and an investment plan.

  • They are designed keeping each investor in mind.
  • A Unit linked insurance plan offers three investment options–flourishing equity options, safe debt options and balanced options, thus satisfying the needs of the risk-averse as well as the aggressive investor.

  • Shift your funds as per their performance.
  • With a mutual fund, if your investment takes a hit due to falling markets, you have only two options, to surrender your fund or to stay invested and hope for the markets to rise again. However, with a ULIP plan you can switch your funds based on their performance.

  • Lesser charges involved.
  • ULIP plans mostly involve a premium allocation charge, which have been capped at 1.35% by the IRDA. Also it's important to note that the charges of a Unit Linked Insurance Plan are only for the first few years, post which the charges start to reduce and disappear altogether.

  • Tax savings.
  • With ULIP plans you have the tax advantage under Section 80C, wherein the premiums paid can be used to avail deductions on your taxable income up to Rs 1,50,000. This is not the case with a mutual fund, wherein only a selected number of funds offer this tax benefit. The returns of a Unit Linked Insurance Plan are also tax exempt!

    Before committing on a certain ULIP, you should ensure that the said plan is an ideal match for your financial standings and future needs. You can follow the steps mentioned below to arrive at a plan that best suits your needs.

  • Always go in for a plan that offers more choices.
  • The ULIP you choose should offer you a wide range of asset classes to invest in. A good ULIP will offer you at least 6 to 8 fund options to choose from.

  • Go in for a ULIP with least charges.
  • The lesser the charges the more scope there is for your money to grow. A good ULIP will invest your entire premium without deducting any premium allocation charge.

  • Look for a plan that offers more premium payment options.
  • With more options to pay your premium, you have the freedom to go in for a payment structure that suits your needs. A good ULIP plan will offer you the options of single premium payments, limited premium payments and regular premium payments.

  • Go for a plan that gives you a better maturity benefit.
  • Choose a ULIP that offers you a higher sum assured or higher fund value of your plan. Some plans take it a notch higher by providing these two options and a third which is a percentage of the premiums you've paid, say for instance 105% of the premiums paid.

  • Lastly, choose a plan that allows you most free switches and least switching costs.
  • One of the major differentiating features of a ULIP is the fact that you can switch your funds between debt and equity markets. Ensure the plan you go in for allows you some free switches, post which the switching charge levied isn't very heavy.

NAV stands for Net Asset Value. The NAV simply refers to the value of each unit of the fund on a given day. ULIP NAV is calculated by adding together all the ULIP holdings on a particular day and then subtracting all liabilities such as operating expenses, marketing expenses, management fees, among other permissible expenses and charges. The NAV of a ULIP is one of the most important factors; it helps determine fund performance history and indicates future performance. The ULIP NAV can be found on the website of every insurance provider and it's a must to compare this aspect before fixing on a plan.