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How Much Are Your Little Expenses Costing You?

By Finserv MARKETS - Apr 6,2019
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How much are your little expenses costing you? (focus on ULIPs investment plan)

What is the first thought that strikes your mind when you hear the word insurance? The answer generally is – lengthy and expensive policy plans with high premiums. But, there is a new sector which has changed the dynamic of insurance and its coverage which is known as Unit linked insurance plans. The following question which arises is, “how are ULIPs different from conventional insurance plans?”

Unit linked insurance plans are a type of ‘protection plus savings’ plans. They combine the benefits of both in a single instrument. The major advantage that they have over the traditional wealth creation tool is that it offers the benefits of life insurance cover too.

The Bajaj Allianz Goal Assure Plan available on Finserv MARKETS, offers tax free investments and zero premium allocation charges. You are offered three types of ULIPs:

1.Child Plan

Our platform offers a child education plan where you get the dual benefits of saving and financial protection. Apart from tax benefits, these funds can be used to fulfil other monetary goals as well.

2.Retirement Plan

The Retirement Plan is a long-term plan where you get an insurance cover. The pension plan helps you to receive a steady income after retirement that safeguards your old age income.

3.Investment Plan

The Investment Plan will assure you market returns with an insurance cover. Under this plan, investment is made in shares, bonds etc. ULIPs are exempted from tax, therefore, offer the best savings in the long run.

What are the charges in ULIPs?

Before you make an investment, there are some charges that one has to pay. These charges cover the entire policy plan and add fuel to the money-making process. Paid in instalments, once or twice, the different charges are:

1.Premium allocation charges

The charges are imposed on the investment premium amount which includes the initial expenses incurred by the company in issuing the policy.

2.Policy Administrative charges

This is an amount deducted regularly for the recovery of expenses undertaken by the insurance company for maintaining the life insurance policy.

3.Surrender charges

These charges are the deduction made for full or partial encashment of premature units, subject to insurance policy.

Why ULIPs?

  • They help avoid the everyday hustle of managing stocks as the insurance company and the fund managers manage them
  • Multiple fund options to choose from.
  • ULIPs are highly transparent and easy to understand.
  • Low surrender charges as you can withdraw as and when you wish to.

After learning how easy and efficient unit linked insurance plans are, one will be easily tempted to invest in a plan like this. The various benefits offered by ULIP plans, only act as a cherry on the top. It is a process to multifold your money while you sit back and enjoy the ULIP returns. However, it is also important to understand these types of investment before you sign on the dotted lines. So, do your homework before you make your decision.

To know more on ULIP investments in depth, you can check out these blogs:

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Bajaj Finserv Direct Limited ("BFDL") is primarily engaged in distribution of financial products and services through its digital platform (“Bajaj Finserv MARKETS”) and inter alia renders services of customer acquisition, providing preliminary credit support activities, fulfilment services and post-acquisition customer services to Banks, NBFCs, HFCs. BFDL is also a registered Corporate Agent (Composite) under valid IRDAI registration number: CA0551 valid till 10-Apr-2024 for solicitation and servicing of Insurance Products. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522