A mix of investments and insurance, ULIP or Unit Linked Insurance Polices offer policyholders the potential of creating wealth with the additional security of a life cover. Under ULIP schemes, a portion of the premium paid by the insured is dedicated towards their life cover while the remaining amount is invested in funds that are either debt, equities or a combination. This allocation depends on the risk appetite of the policyholder and in turns dictates the returns in conjunction with market performance.
As a parent, you know that child investment plans are a necessity. With a rise in education-related costs, ensuring that your child can pursue their dreams is important. Here's
where the best ULIP plans at Bajaj Finserv Direct are of help. You can choose the funds to invest in, can switch between funds, and secure your child's future.
Enjoy post-employment life knowing your future is secured with retirement plans. With a surge in living costs, having funds at your disposal gives you financial
freedom, without depending on your provident fund. Go with Bajaj Finserv Direct and enjoy tax-free investments, free life cover and other such ULIP benefits.
Small investments go a long way! Be it saving money to enable your child to pursue their dream or dealing with post-retirement requirements, investments made today will make a
big difference tomorrow. With ULIPs at Bajaj Finserv Direct, enjoy investment benefits like free life cover, flexibility in fund allocation and zero allocation charges.
With premiums invested in both equity and debt, and a minimum lock-in period of 5-years, ULIP plans are the best option for long-term financial planning.
With a ULIP you get to the dual benefits of an investment plan along with a life insurance policy.
With all charges detailed in the ULIP plan policy document itself, customers know what they pay for and how the funds are used.
Under the Income Tax Act of 1961, ULIPs are tax-free investments. As a customer, you needn't pay any tax during investment, while your money grows, during fund switches or during maturity.
ULIPs offer the benefit of a life cover which ensures that your family is secure, even in your absence.
The best ULIP plans allow you the choice of investing in equity, debt or a mix of both. Though volatile, equity funds come with long-term high growth potential whereas debt funds are a safer choice. In addition to this, there's always the choice of investing in balanced funds (a mix of equity and debt). Based on your risk appetite, you can choose to invest in either of the three options.
Under the Income Tax Act of 1916, you can save money by investing in a ULIP. In doing so, you must know that there are tax advantages at various stages of your life insurance policy which should be offered by the insurance provider you choose to go with. The advantages of the best ULIP plans in the markets include tax exemption at the time of investment (under sections 80C, 80CCC and 80D), tax exemption when the money invested grows, tax exemption during fund switches, and finally, exemption during maturity benefit.
Two of the most important financial needs of life are met when one invests in a ULIP - protecting and savings. Transparency is important and hence it is important that your insurance provider clearly mentions the following charges before you purchase – 1. Premium Allocation charge, 2. Policy Administration charge, 3. Mortality charge and 4. Fund Management charge.
Nature of ProductA ULIP is a combination of investment plans and a life insurance policy.
Tax-free BenefitsEnjoy Tax-free benefits when investing, while money grows, when switching funds and on maturity under Sections 80C, 80CCC, 80D of the Income Tax Act, 1961.
CoverageOffers life cover.
Lock-in PeriodThe lock-in period for ULIP is usually 5 years.
Liquidation of Funds You must wait for the completion of the lock-in period to liquidate funds.
TermULIPs are usually long term.
FlexibilityYou enjoy the flexibility of choice when it comes to switching between funds.
ReturnsReturns depend on the type of investment fund you choose in conjunction with the performance of the market.
Nature of Product Mutual Funds are a pure investment option.
Tax-free Benefits Only Equity Linked Saving Schemes (ELSS) investments under Section 80C are tax-free.
Coverage Doesn’t offer life cover.
Lock-in Period No lock-in period. You can buy and sell anytime. However, Equity Linked Saving Schemes (ELSS) come with a 3-year lock-in period.
Liquidation of Funds Except for ELSS which come with a 3-year lock in period, you can choose to liquidate funds when needed.
Term Mutual Funds can either be short, medium or long term.
Flexibility No fund-switch option available.
Returns Returns here depend on fund allocation in conjunction with market performance.
Filing claims was never so simple. Just follow these steps and you’re done!
Unit-linked Insurance Plan / ULIP is a market-linked product that enables you to secure your family future while giving you an opportunity to invest in the market. The product aggregates the best of both worlds and is essentially divided into two parts: one part is the life insurance risk cover (based on the premium) and the other is the investment in market instruments like stocks, bonds or funds (equity, debt or both) basis your risk appetite.
Additional benefit of investing in ULIPs is that it helps you to save tax. Rs. 1.5 Lakh from the premium paid is exempted under Section 80C and the returns received on maturity are exempted under Section 10(10D) of the Income Tax Act, 1961.
Bajaj Allianz ULIPs are highly flexible and let you manage your investments according to your needs, goals and choices. If your goal is long-term wealth creation while ensuring the safety and security of your family then, ULIPs are definitely the right product for you.
You can choose from the following types of ULIPs-
Retirement Plan – Invest in a ULIP retirement plan to prepare yourself for a secured life post-retirement. Under this plan, an individual pays the premium during the tenure of his/her employment. This premium is divided into two parts – one part goes towards your life insurance cover and the other part is invested in an instrument of your choice. This small amount that you periodically invest builds a corpus which you can use after retirement.
Child Plan – With a ULIP child plan, you take a step towards securing your child’s future. Whether it’s your child’s education, marriage or any other important event, this plan helps you to stay financially secure. A child ULIP plan also offers life insurance cover for your child. This way, you can protect your child against any unforeseen situations and ensure they realize all their dreams.
Investment Plan – Your earnings today might not be adequate tomorrow. Moreover, high inflation rates and constantly rising prices of commodities can eat away your savings. Therefore, it is necessary to invest today to secure your future! A ULIP investment plan can help you achieve your goals of long-term wealth creation and security for your family. What’s more? Your investment in ULIPs, as well as returns on maturity, are completely tax-free!
Lack of adequate knowledge and misinformation has led to a lot of myths hovering around investments in ULIPs. Let’s break them!
ULIPs give you an option to invest in market instruments that can either be debt only, equity only or a mixture of debt and equity. You can choose funds that best suit your need, risk appetite, and long-term objectives. With Bajaj Allianz ULIPs, you also get the facility to switch between funds at any given point in time depending on your personal preference and risk appetite.
You can! ULIPs allow you to invest your surplus funds. You can pay a top-up premium at any given point in time during the tenure of the ULIP and enjoy the same benefits and tax deductions.
Market volatility has no effect on your insurance cover. Your insurance policy remains intact irrespective of the rise or fall in the market. In case the insured dies during the tenure of the policy, he / she gets the full amount of the life cover as stated in the policy.
ULIPs are long term investment products, where returns are dependent on the performance of the funds that one has invested in. With a good selection of funds and efficient switching between funds at the right time, Bajaj Allianz ULIPs can give good returns over a long-term period along with an insurance cover.
It is still unknown to people that charges of investing in ULIPs have reduced significantly. The charges that are typically levied on your premium amount are – premium allocation charges, policy admin charges, fund management charges and mortality charges. Insurance Regulation Development Authority of India (IRDAI) has capped these annual charges to a good extent. If the lock-in period of your ULIP plan is 10 years or less, these charges may be a little higher as compared to ULIP plans with a 10 year+ lock-in period. Therefore, it makes sense to invest in ULIPs for long durations.
While investing in Bajaj Allianz ULIPs, you can avail a variety of tax benefits in the form of deductions and exemptions under the Income Tax Act, 1961.
Under section 80C, you can claim deductions equivalent to the premium amount paid on Bajaj Allianz ULIPs as life insurance or under 80CCC as pension up to a permissible limit. This limit is currently set at Rs 1.5 Lakh. You can avail this deduction on the premium amount up to 10 % of the sum assured with a ceiling of Rs.1.5 Lakh. You can also claim all the charges collected by the insurer such as service charge as a deduction.
Moreover, the amount you receive as partial withdrawal / at maturity of the ULIPs is tax-free under section 10(10D) of the Income Tax Act, 1961. The death benefit payout upon death of the policyholder is also exempt from tax.
Invest your way to a financially secured future with Bajaj Allianz Future Gain ULIP plan which offers great flexibility and high returns. Watch your money grow with dual benefits of market investments and life cover under a single policy. Have a look at exclusive Bajaj Allianz ULIP plans available on Finserv Markets designed to help you achieve your financial goals.
With a Unit Linked Insurance Plan, money invested as premium is transferred to a pool called ‘Unit Linked Fund'. The insurance company manages this fund by investing the money in debt and equity instruments to provide dual benefits of insurance and investment returns to the policy holder.
The individual parts that a unit linked insurance plan is divided into is called a unit.
Fund value refers to the total value of the premiums of the policy holder invested in various funds. Fund value is calculated using the following formula - Total Number of Units under a ULIP policy X Net Asset Value.
The sections that you need to verify include: 1. Any charges or deductibles mentioned (policy allocation/fund management), 2. Any features and benefits included in the ULIP policy (premium payment options/loyalty additions), 3. Any exclusions/limitations mentioned in the policy (lock-in-period/waiting period/pre-existing illnesses), 4. Policy lapse and disadvantages associated, 5. Any benefits that are payable, and 6. Any other disclosure/s mentioned in the proposal form.
Yes, there are. You can claim the money invested in ULIPs under the following sections - 80C (life insurance) and/or 80CCC (pension). For this, the maximum amount that can be claimed under these sections is Rs. 1,50,000. Deductions on life insurance can be availed up to 10% of sum assured or the annual premium, whichever is lower subject to a limit/ceiling of Rs. 1,50,000. In addition to this, the overall limit under Sections 80C/80CCC/80CCD (1) is capped at Rs. 1,50,000. You may choose to invest a bigger/higher amount, however, the cap on deductions is Rs. 1,50,000.
ULIPs have always had an edge over Mutual Funds and with the new LTCG tax in place, it is pegged to deliver even more. This edge existed even before long-term gains arising out of stocks and mutual funds were proposed to be taxable. Earlier, for equity mutual funds or balanced schemes that were held for less than a year, a 15% tax was levied on the short-term capital gains. However, when it comes to ULIPs, since it is an insurance product, short-term gains are tax-free under Section 10(10D). With the implementation of the LTCG tax, all gains from balanced and equity schemes are to be taxed at 10% but ULIPs continue to be tax-free. The benefit of ULIPs extends beyond equity funds. It encompasses the fixed income space too. Income made from fixed deposits is taxed at a rather marginal rate while LTCG for debt funds get taxed at 20% post indexation. Gains from ULIP are tax-free, whether short-term or long-term.
The benefit that the ULIP policy holder receives at the end of his/her policy term is called the Maturity Benefit. This amount is equal to the value of the fund at that specific time of maturity.
In the unfortunate event of the death of the policy holder (in this case, you), the death benefit amount shall be paid to your nominee. This will be a lump sum amount which is higher than the sum assured opted by the policy holder (you) or the value of the fund as on the date of the death of the policy holder. However, for this to come through, the policy must be active and all premiums must be duly paid, till date.
There are 5 charges involved when you invest in ULIPs. These charges are deducted from the insurance premium amount that you pay. The remaining amount is then invested in various strategies and polices that will generate returns for you. The types of charges levied include: Premium Allocation Charges: This refers to a percentage of the premium amount which is deducted upfront and goes towards allocation of premium to various funds selected by the policy holder. Policy Administration Charge: This is charged by the insurance company and goes towards the administrative charges borne by the insurer for the maintenance of the ULIP plan. Mortality Charges: This refers to the charges levied by the insurer for providing policy holders with the insurance coverage. Fund Management Charges: As the term suggests, this charge is levied by the insurer and goes towards fund management. Surrender Charges: Should you decide to surrender your plan prematurely (before tenure), you would have to bear a charge. This is referred to as surrender charges. Normally, one can surrender their ULIP plan after a period of 5-years.
No. The interest that you earn on a ULIP plan is tax-free.
Generally, you would need to wait for the end of the 5-year lock-in period to surrender your ULIP plan. However, should you choose to do it earlier, you will have to pay a charge as applicable.
Any additional investment which is over and above the normal premium amount that you are allowed to make in a ULIP plan is called a top-up. When it comes to tax-exemption, top up premiums enjoy this benefit, just as a regular premium would.
Instead of going for a lump sum amount during maturity, some of the ULIP plans allow policyholders the option of receiving these benefits as periodic instalments over a 5-year period. This happens post-maturity and is referred to as ‘Settlement.’
Yes, there are. Partial Withdrawal is only allowed under the following circumstances: 1. If the amount of withdrawal is Rs. 5000, 2. The value of the Regular Premium Finds does not fall by four times as compared to the Annual Premium post partial withdrawal, 3. The maximum amount of the partial withdrawal is 10% of all the premiums that have been paid. 4. The total amount that is withdrawn throughout the term of the ULIP policy cannot exceed more than 50% of the total premiums that are paid, 5. The interval between two partial withdrawals is not less than 3 months. This said, a partial withdrawal is only allowed when the insured attains 18 years of age.
Under the following scenarios, your ULIP plan will automatically and immediately get terminated - 1. Policy foreclosure, 2. On the date the insurance provider receives intimation about the death of the policyholder, 3. If payment of surrender benefit or discontinuance value is made by the policyholder, 4. On the date of the maturity of the ULIP plan, unless settlement opted for by the policyholder, 5. Expiry of the settlement, 6. Cancellation of the policy during the initial free look period. If the policyholder has opted for settlement, the ULIP policy gets terminated post the last settlement pay-out.
No, life cover isn't available during the settlement period.
When the policy comes to an end, as on the date of maturity, the complete amount deducted as mortality charges during the tenure of the life cover policy term is added back as ROMC to your fund.
There are 8 funds to choose from: 1. Equity Growth Fund II, 2. Accelerator Mid-Cap Fund II, 3. Pure Stock Fund, 4. Pure Stock Fund II, 5. Asset Allocation Fund II, 6. Blue chip Equity Fund, 7. Bond Fund and 8. Liquid Fund.
As a policyholder, you can seek a refund of the premiums upon disagreement with the terms and conditions, within 15 days of receiving the policy document, also known as the free-look period. In such a situation, the premium amount shall be refunded after deducting any expenses incurred for medical examinations, stamp duty and the risk premium proportionate to the coverage period.
Yes, you can invest in any additional contribution which is over and above your regular premium based on your choice, subject to the additional feature being available for the unit-linked insurance plan. This facility is called as ‘Top-Up.’
Yes, we allow policyholders to switch funds, provided the feature is available for the unit-linked insurance plan.
The insurance company provides and allocates the loyalty additions to the fund value of a regular premium as a percentage of one annualized premium. This happens from the 6th year of the policy, provided all premiums are paid and up to date. These additions include: 1. 5-year policy: Here loyalty additions are not applicable, 2. 10-year policy: 0.50% of loyalty addition applicable, 3. 15-year policy: 1% of loyalty addition applicable, 4. 20-year policy: 1.5% of loyalty addition applicable.
On the date of maturity, boosters are added to the fund value of the regular premium, provided all premiums are up to date and paid. These fund boosters that are provided as a percentage of one annualized premium are: 1. 5-year policy: Fund Booster benefit not applicable, 2. 10-year policy: 20% fund booster benefit applicable, 3. 15-year policy: 40% fund booster benefit applicable and 4. 20-year policy: 60% fund booster benefit applicable.
Under Bajaj Allianz Future Gain, there are two portfolio strategies. These are - 1. Investor selectable portfolio strategy and 2. Wheel of life portfolio strategy. Investor selectable portfolio strategy - Under this strategy, the policyholder can choose to invest between 8 funds and enjoys the freedom of allocating premiums based on his/her choice. Wheel of life portfolio strategy - Financial needs and goals change as life progresses. Therefore, having an investment strategy that can be re-aligned to such changes is essential. The wheel of life investment strategy allows the policyholder to allocate premiums among 5 funds in pre-defined ratio. This ratio changes as the policy ages towards maturity.
Yes, this is possible. However, the policyholder must wait for a year to do so. Also, do keep in mind that this is subject to the minimum amount allowed under the particular product and is only allowed on policy anniversary.
Yes, the choice to increase or decrease the term of premium payment is provided to the policyholder. However, this is again subject to the minimum and maximum terms allowed under that specific ULIP product/plan.
As you already know, the entire premium amount is not used for purchasing units. Though we do not charge any allocation fees, there are other deductions and charges that vary from product to product. These are deducted from your premium amount and the remainder is used for purchasing units.
On discontinuance of premiums during the first 5 policy years: At the end of the notice period of 30 days, the policy will be converted to a Discontinued Life Policy and the Fund Value minus discontinuance charge will be transferred to the Discontinued Life Policy Fund. The discontinuance value shall be payable at the end of the lock-in period of 5 policy years. On discontinuance of premiums after the first 5 policy years: A notice will be sent by the Company to the Policyholder within 15 days of the expiry of the grace period to exercise one of the options mentioned below within 30 days of receipt of such notice - 1. Option A: Revive the Policy or, in writing, agree to revive the policy within the revival period by paying all due premiums, 2. Option B: Intimate the Company In writing to surrender the policy and receive the surrender benefit, or 3. - Option C: In writing, intimate the Company to continue the policy as a paid-up policy with a paid-up sum assured with all the other benefits excluding additional rider benefits, Loyalty Additions & Fund Boosters, subject to deduction of all applicable charges under the policy. Till the expiry of the revival period or receipt of intimation of surrender request as per or receipt of intimation to convert as paid-up policy, whichever is earlier the policy shall be treated as in-force with all risk cover, including additional rider benefits, if any, by deduction of all applicable charges under the policy. If the company does not receive any intimation then, on the Date of Discontinuance, the Policy will be terminated and the Surrender Benefit shall be paid immediately.