What is a Unit-Linked Insurance Plan?

Finding the right insurance plan for a better tomorrow can be an overwhelming task. But what if we tell you that you can seek the benefits of investment as well as insurance both under a single policy? That’s right! ULIPs or unit-linked insurance plans offer you the potential to grow your wealth along with the security of a life insurance cover. It can help you achieve your financial goals, such as saving for a stable retirement, your child’s higher education, or even retire early. Thus, a unit-linked insurance plan (ULIP) can help you smartly achieve your long-term financial goals while protecting you with a life cover.

How do ULIPs Work?

A ULIP is a goal-based investment tool. It is designed in a way to help you meet your financial goals in time. However, before you buy the policy, you should understand where your money goes when investing in ULIPs.

Primarily being an insurance policy, you have to pay premiums towards your ULIP investments. A part of the premium paid is to provide the life insurance cover and the remaining amount is invested in different funds, i.e. equity, debt, or a combination of the two. The type of fund(s) you choose to invest in depends on your risk appetite.

So, if you are willing to take higher risk on your investments, we suggest you opt for equity-oriented funds. On the other hand, if you do not want to risk your hard-earned money, it is best to park it in debt funds. To earn reasonable returns without high risks, people often prefer investing in balanced funds, i.e. a combination of debt and equity funds. Since the investment component of ULIP helps you meet your financial goals, you have the liberty to choose the kind of fund(s) you want to invest in.

With a ULIP investment, you can switch from debt to equity funds and vice versa (known as fund switching facility in ULIP), depending on the market performance. For instance, if certain funds are underperforming, you can make necessary changes to your investment portfolio and switch to ones that deliver better returns.

Besides, you can use the fund switching facility to meet your changing life goals. For instance, if you purchase a ULIP at an early stage in life, you can opt for a higher risk investment (equity funds) as you have lesser financial liabilities. However, as your financial responsibilities increase and you move closer to your retirement, you can switch to debt funds that offer lower risks.

ULIP Child Plans

Child Plans

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.

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.

ULIP Pension Plans

Retirement Plans

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.

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.

ULIP Investment Plans

Investment Plans

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.

big difference tomorrow. With ULIPs at Bajaj Finserv Direct, enjoy investment benefits like free life cover, flexibility in fund allocation and zero allocation charges.

Why Should You Invest in Unit Linked Insurance Plans?

Long-Term Wealth Creation

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. 

Dual Benefits

With a ULIP you get to the dual benefits of an investment plan along with a life insurance policy.

Transparency Guaranteed

With all charges detailed in the ULIP plan policy document itself, customers know what they pay for and how the funds are used.

Tax Benefits

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. 

Protection for self and family

ULIPs offer the benefit of a life cover which ensures that your family is secure, even in your absence. 

Benefits of ULIP

A ULIP investment is one of the most reliable wealth creation instruments available in the market. With this product, you can reap multiple benefits. Let us tell you why to invest in ULIP.

  • Helps Build Wealth Over Time

With the liberty to invest in equity and debt funds along with a minimum lock-in period of five years, ULIP is the best investment instrument for accomplishing long-term goals.

  • Dual Benefits

ULIP offers dual benefits – to make investments of your choice as well as avail an insurance coverage – all under a single plan.

  • Flexibility

You get the flexibility to choose the type of funds you want to invest in. Moreover, you can also switch the funds based on market movement.

  • High Returns

Since you have the flexibility to switch funds based on market movements, you can choose to invest in funds that reap higher returns on the invested amount.

  • Tax Benefits

ULIP is one of the best tax-saving tools available in the market. The policy provides several tax benefits under various sections of the Income Tax Act, 1961. We have explained the ULIP tax benefits in detail further ahead.

  • Protection for Self and Family

With the life insurance coverage, you will be able to protect yourself as well as your loved ones, even in your absence.  

Benefits of Choosing ULIPs – The Ideal Financial Tool

Bajaj Allianz ULIP Plans

Which ULIP Suits you the Best?

We, at Bajaj Markets, focus on helping you accomplish your future financial goals. So, whether you are planning for a care-free retirement, your child’s future, or building your wealth, we offer goal-based ULIPs on our platform. Depending on your financial needs, you can choose to invest in one of the options available. But before you make any decisions, let us first understand each of these plans in detail.

  • Child Plan

With a 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 plan also offers life insurance cover for your child. This way, you can protect your child against unforeseen situations and ensure they realise all their dreams.

For instance: Shalini is a young mother wanting to save for her child’s future monetary needs:


Shalini; Female; 32-years old; child (5 years old)

Amount to be Invested

₹10,000 every month

Policy Term

20 years

Premium Paying Term

7 years

Expected Maturity Return

₹35.05 lakh

  • Retirement Plan

Invest in a pension 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 that you can use after retirement.

Take this example for instance: Nitin is working towards saving for his retirement:


Nitin; Male; 30 years; save for retirement

Amount to be Invested

₹1 lakh (annually)

Policy Term

20 years

Premium Paying Term

15 years

Expected Maturity Return

₹50.17 lakh

  • 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! Here’s where an investment plan comes in to help you achieve your goals of long-term wealth creation and provide security for your family. What’s more? Your investment in ULIPs as well as the returns earned on maturity are tax-free!

For instance: Radhika is a young professional wanting to invest in the market to grow a steady corpus:


Radhika; Female; 24 years; for investment purpose

Amount to be Invested

₹10,000 every month

Policy Term

20 years

Premium Paying Term

15 years

Expected Maturity Return

₹57.95 lakh

Let us dive deeper into ULIPs to understand them in more detail.

Types of ULIP

Type 1 ULIPs

  • In the event of your unforeseen demise, the nominee will receive the death benefits.

  • The amount received can either be equal to or higher than the sum assured or the fund value of the company.

  • The mortality charges keep reducing annually.

Type 2 ULIPs

  • In the event of your unforeseen demise, the nominee receives death benefits.

  • This amount is equal to the sum assured plus the fund value.

  • It is noteworthy that the premiums paid for Type 2 ULIP are relatively higher.

  • Also, Type 2 considers mortality rates annually as the risk of your death increases with your age.

ULIP Investment Tips

Features of ULIP

Here are the features of unit-linked insurance plans that you need to know.

1. ULIP Premium Payments

ULIP offers several premium payment methods. These include:

  • You can pay your ULIP premiums annually, bi-annually, or monthly, based on your convenience.

  • ULIPs also allow you to pay a single premium payment, wherein you invest a lump sum amount at the time of buying the policy.

  • Typically, you pay premiums towards a ULIP investment for the policy term you opt for at the time of purchase. However, some insurers allow you to decide the number of premium payment years.

2. ULIP Lock-In Period

The lock-in period for ULIPs is five years. This means that for the first five years, the money that you invest in ULIPs cannot be accessed. You are only allowed to withdraw funds from your ULIP investment after this five-year lock-in period; however, this is not recommended. The longer you stay invested in a ULIP plan, the better are your chances of earning good returns.

Income Tax Benefits on ULIP

ULIP investments provide several features and benefits that you can avail. However, the highlighting factor of the instrument is its tax benefits. Along with building your wealth over time and securing your family’s financial future, ULIPs allows you to save money on tax.

Here’s a quick overview of ULIP tax benefits:

Tax Benefit on ULIP Premium

The premiums paid towards your ULIP investments can be claimed for tax deductions under Section 80C of the Income Tax Act, 1961 (old income tax structure). The maximum amount you can claim as a deduction under this section is ₹1.5 lakh.

Tax Benefit on ULIP Maturity

If all ULIP premiums are paid on time, you do not pay any tax on maturity (for policies issued before February 1, 2021) under Section 10(10D) of the Income Tax Act.

However, for ULIPs purchased after February 1, 2021, the scenario is different. If the aggregate annual premium exceeds ₹2.5 lakh, the maturity benefit will be taxed as a capital asset as stated in the Union Budget 2021.

Tax Benefit on Partial Withdrawals

Once the five-year ULIP lock-in period is complete, you can make partial withdrawals. These withdrawals are tax-free under Section 10(10D) of the Income Tax Act, 1961.

Moreover, the premium payable to the sum assured should not exceed 10%, and the partial withdrawal amount should be less than or equal to 20% of the fund value.

Tax Benefit on Payouts in the Event of Death

In case of your unfortunate death, your family will receive the entire sum assured or the total fund value (whichever is higher). This payout is completely exempt from tax.

Tax Benefit on ULIP Top-Ups

Another great feature of ULIP is that the policy allows you to increase your investment with top-up premiums. As such, you can invest any surplus cash in ULIP and save money on tax. Moreover, these top-ups are eligible for tax deductions under Section 80C of the old income tax regime.

Long-Term Capital Gains (LTCG) Tax Benefit

LTCG tax came into the picture with the Union Budget 2018. It is applicable on capital gains exceeding ₹1 lakh from equity investments (including ELSS). Thus, if you invest in equity-oriented funds through ULIPs, you can avail this tax benefit.

With this, we believe that you have adequate information on unit-linked insurance plans. Now, let’s take a look at the different ULIPs available on Bajaj Markets.

ULIPs on Bajaj Markets

No matter what your financial goal is, Bajaj Markets has you covered. The different ULIPs available on our platform are:

Bajaj Allianz Future Gain

Allows you to secure your child’s future and maximise your benefits at a nominal rate.

Some highlighting features of Bajaj Allianz Future Gain are as follows:

  • Investments starting from ₹2,500 per month

  • Tax-free investments

  • Choose between two investment portfolios

Bajaj Allianz Goal Assure

Allows you to financially secure your retirement days so that you can live a peaceful life.

Some highlighting features of Bajaj Allianz Goal Assure are as follows:

  • Investments starting from ₹3,000 per month

  • Avail tax benefits up to ₹1.5 lakh.

  • Choose between four investment portfolios and eight fund options

Bajaj Allianz Long Life Goal

Allows you to invest for a secure financial future as you pay premiums for a limited time and get regular income during your retirement days.

Some highlighting features of Bajaj Allianz Long Life Goal are as follows:

  • Investment starting from ₹2,500 per month

  • Get regular income during retirement

  • Tax benefit on investments

Why Choose Bajaj Allianz Life’s ULIP Plans?

In the long run, each investment makes a significant difference to your portfolio, further taking you closer to your financial goals. Hence, for each financial purpose in your life, there is a ULIP plan available in the market. Bajaj Allianz Life’s ULIP Plans are a reliable mode of investment for accomplishing your dual needs – insurance as well as building your wealth alongside.

That’s not it!

With Bajaj Allianz Life’s ULIP plans available on Bajaj Markets, you can benefit from facilities such as partial withdrawal of funds, alter premium payment frequency, rider options, and more. Some plans also offer features like the return of mortality charges, return enhancers, loyalty additions, fund boosters, and more.

Just browse the range of online plans and choose a policy that best suits your financial needs to get high ULIP returns.

Why Choose ULIPs Over Traditional Investment Options?

Whether you have invested in Mutual Funds or FDs, buying ULIPs will diversify your investment portfolio. The following table summarises why investing in ULIPs over/along with other investment options should be your go-to financial strategy.



Mutual Funds

Bank Fixed Deposits

Nature of Product

Combination of life insurance and investment facility.

Pure investment option.

Fixed investment option.


Provides life cover that is a minimum ten times the premium amount.

It does not offer a life cover.

It does not offer a life cover.

Tenure Of Investment


Either be short, medium, or long-term


Tax Benefits

The premiums paid up to INR 1.5 lakh are exempted from tax under Section 80C of the Income Tax Act, 1961.

The maturity amount is tax-free under Section 10(10)D.

Only the Equity Linked Savings Schemes (ELSS) investments are exempted from tax under Section 80C of the Income Tax Act, 1961.

The invested amount of up to INR 1.5 lakh is tax exempted under Section 80C of the Income Tax Act, 1961.

The maturity interest amount is taxable.


Flexibility of choice when switching between funds.

No such flexibility offered.

No such flexibility offered.


ULIP returns depend on the type of funds you choose to invest, depending on the market performance.

Mutual fund returns depend on fund allocation in conjunction with the market performance

Fixed returns

Key things to consider when choosing a ULIP

  • What are the best funds/plans to invest in?


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. 


  • Are you getting maximum leverage from the tax-free nature of ULIPs offered by your insurer?


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. 


  • What are the charges you pay when investing in ULIPs?

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.

Types of Funds in ULIP

ULIP funds are usually classified based on the risk and their investment objective. Following are some top-performing ULIP funds we know of.

  • Equity Funds - Large-Cap and Mid-Cap Funds (High Risk)

Here, your money is primarily invested in company stocks and equities. Since they are high-risk funds, equity funds are best-suited for people with a high risk appetite. The main investment objective here is to earn higher returns in a shorter duration.

  • Income and Bond Funds (Medium Risk)

Here, your money is invested in fixed-income options such as government securities and corporate bonds. The risk involved in medium and so are the returns.

  • Balanced or Asset Allocation Funds (Medium to High Risk)

These are hybrid ULIP funds. Your money will be invested in a combination of equity and fixed interest funds. The amount is distributed between high-risk equities (company stocks) and low-risk funds (fixed-income options).

  • Cash Funds (Low Risk)

These are also known as money market funds or liquid funds and are meant for investors with a low risk appetite. Here, your money will be invested in short-term market instruments such as cash and bank deposits, treasury bills, and commercial papers.

After this, it is obvious to have questions like how ULIP funds will perform? Is there a way to calculate the risk involved? Well, the answer is yes! Keep reading to know how you can calculate your ULIP fund performance.

ULIP Fund Performance

When you make ULIP investments, it is essential to understand the risk involved. Hence, ensure that you calculate the risk before you zero in on your ULIP.

As mentioned earlier, you can either invest in high-risk equity funds or low-risk debt funds. Moreover, with ULIPs, you also get an option to invest in funds that are a combination of the two (balanced funds). The risk involved for you, as an investor, can be calculated with the help of our ULIP risk calculator. So, look no further!

ULIP Charges

The charges associated with your ULIP investments can vary from insurer to insurer in India. Also, the amount charged can vary depending on your plan. Some ULIP charges that you should be aware of before buying the policy are as follows:

  • Fund management charges

  • Surrender charge

  • Policy administration charges

  • Premium allocation charges

  • Fund switching charges

  • Partial withdrawal charges

  • Mortality charges

  • Premium redirection charges

  • Rider charges

  • Miscellaneous charges

  • Guarantee charges


Visit Bajaj Markets to read about ULIP charges in detail.

ULIPs - Myths and Truths

Lack of adequate knowledge and misinformation has led to a lot of myths hovering around investments in ULIPs. Let’s break them!

  • Myth #1: ULIPs carry high risk as they invest only in equity.

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.

  • Myth #2: You cannot add to your existing funds.

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.

  • Myth #3: The insurance cover gets affected due to market conditions

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.

  • Myth #4: ULIPs do not provide good returns

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.

  • Myth #5: ULIPs have high charges

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. 

ULIP Claim Process

Filing claims was never so simple. Just follow these steps and you’re done!

  • 1

    Register your claim online

  • 2

    Upload documents online

  • 3

    Claim Assessment

  • 4

    Claim Decision

Latest ULIP News

Odisha Government decides to implement PM-ABHIM

Odisha Government has now decided to implement the pan Indian health scheme, PM-Ayushman Bharat Health Infrastructure Mission, PM-ABHIM. Notably, Odisha is one of the three states and union territories that are yet to join the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana, AB-PMJAY. The PM-ABHIM scheme was launched in October 2021 with an outlay of ₹64,180 crore. As an important part of the scheme, Ayushman Bharat-Health and Wellness Centres will be set up at 17,788 sub-health centres in the rural areas of seven high focus states like Odisha and three northeastern states. A total of 11,044 health and wellness centres along with 3,383 block public health units are going to be established in 11 high focus states/UTs urban areas.


- Mar 21, 2022

ULIP to be a viable tax saving option after tax on PF contribution and rate cuts

Unit-Linked Insurance Plan or ULIP is a viable tax-saving option for earning individuals facing tax deductions on their Provident Fund contributions. Due to the interest rate cuts and tax applicability on the interest earned on PF, individuals making excess contributions require a more-efficient tax-saving option. The four-decade low PF interest rate of 8.1% from the previous 8.5% has made it an unfavourable tax-saving option. Moreover, any interest earned on employee contribution of over ₹2.5 lakh is now subject to tax. Investment options such as ULIP offer a lucrative alternative to employed individuals with tax benefits on the premium, death payout and the maturity component!

- Mar 16, 2022

IT Department announces taxation of ULIP proceeds, aims to create ‘level playing field’ with MF

As per the Central Board of Direct Taxes (CBDT), proceeds from high-level Unit Linked Insurance Plans (ULIPs) have now been made taxable. As per a report, this step to tax ULIP proceeds was taken by the CBDT in order to create a ‘’level playing field’’ with mutual funds. The new change was made as an Amendment in Section 10(10D) of the Income Tax Act, where the sum received under ULIPs issued on or after Feb 1, 2021 will be taxable if the annual premium that is payable for any year exceeds ₹2.50 lakh. The officials at CBDT said that this move was made after it was observed that ULIPs were being preferred by investors over mutual funds for investments.

- January 26, 2022 

AMFI Pitches for Tax Parity Between Mutual Funds and ULIPS

The regulatory body of mutual funds, AMFI, has requested the government to bring tax parity between mutual funds and ULIPs ahead of the Union Budget 2022. The Association of Mutual Funds in India (AMFI) has asked for tax parity in regards to the capital gains on withdrawal of ULIP investment and for the redemption of mutual fund units. Currently, the ULIP maturity proceeds are taxed and treated as capital gains only if the annual premium paid towards ULIPs is more than ₹2.5 lakh. If the premiums paid are within this limit, investors can claim the proceeds under Section 10(10D) of the Income Tax Act, 1961.

- December 13, 2021

Survey reports increased affinity of investors towards ULIP investment

A Bajaj Allianz Life Insurance survey recently reported that as many as 92% of respondents showed increased affinity towards ULIPs since the pandemic. It reported that two out of three Indians plan to invest in Unit-Linked Insurance Plans (ULIPs) in the upcoming year, i.e. 2022. The affinity towards ULIPs was more in non-metro regions and among mass-affluents than average Indians. Good returns, income tax benefits, and fund performance were the top three reasons behind this increased affinity.

- Jul 02, 2021

Have a look at our exclusive Bajaj Allianz Life’s ULIP plans available on Bajaj Markets designed to help you achieve your financial goals.

Learn more about Unit Linked Insurance Plans. Read in detail about the terminology used in these plans, the investment options, the top myths about ULIPs, current trends and much more. Have a look at the top articles on ULIPs before you explore Bajaj Allianz Life's exclusive ULIP plans available on Bajaj Markets.

Manage all your ULIP related queries here

What do you mean by 'Unit Linked Insurance Plan’?

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.

What is meant by 'Unit'?

The individual parts that a unit linked insurance plan is divided into is called a unit.

What is ‘fund value’ and how do you calculate this?

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.

Before submitting my proposal form, what are the sections that I should verify/double-check?

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.

Are there tax benefits associated with investing in ULIPs?

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.

Given the new LTCG tax, how is investing in ULIPs better than investing in Mutual Funds?

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.

At the end of my ULIP policy term, what is the amount that I will receive?

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 my absence, what will my family receive?

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.

What are the charges involved when investing in Bajaj Allianz ULIP plans?

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.

Is the interest earned on ULIP plans taxable?

No. The interest that you earn on a ULIP plan is tax-free.

I want to surrender my Bajaj Allianz ULIP policy. Can I do this anytime?

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.

What do you mean by top-ups? Are these also tax-exempted under Section 80C?

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.

What do you mean by ‘Settlement’?

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.’

Are there any terms and conditions associated with partial withdrawal?

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.

What are the conditions/circumstances under which my Bajaj Allianz ULIP policy can get terminated?

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.

Do you offer life cover during the period of settlement option?

No, life cover isn't available during the settlement period.

What do you mean by Return of Mortality Charge (ROMC) Benefit which comes under Bajaj Allianz Life Goal Assure?

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.

What are the funds under ULIP that policyholders can choose?

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.

I am not satisfied with my ULIP policy. Can I get a refund?

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.

Can I invest in an additional contribution over and above the regular premium?

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.’

Can I switch funds?

Yes, we allow policyholders to switch funds, provided the feature is available for the unit-linked insurance plan.

Please list the loyalty additions that are payable under Bajaj Allianz Life Goal Assure.

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.

What do you mean by Fund Boosters that come as a benefit provided under Bajaj Allianz Life Goal Assure Plan?

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.

What are the two different portfolio strategies available in Bajaj Allianz Future Gain?

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.

Is it possible for the policyholder to decrease his/her sum assured that is provided under the Bajaj Allianz Future Gain portfolio strategy?

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.

Is it possible for the policyholder to change the term of premium payment under the Bajaj Allianz Future Gain portfolio strategy?

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.

How much of my premium amount is used in purchasing units?

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.

What will happen in case of non-payment of premiums?

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.

What is Premium Redirection in ULIP?

Premium Redirection is a feature in ULIP that can be used to change how your upcoming funds will be allocated under the ULIP plan. For instance, if you were previously investing 100% of your funds in mutual funds, and now wish to invest 60% in mutual funds and 40% in debt funds, you can do that through Premium Redirection in the future.

What is Partial Withdrawal in ULIP?

ULIP plans provide the option for the customers to withdraw a part of their funds for use before the tenure of the policy is over. This option is called Partial Withdrawal in ULIP. 

What is the net asset value (NAV)?

The net asset value or NVA is the total monetary value of your assets minus the value of the liabilities under your ULIP investment fund. 

Why should you invest in ULIP now?

ULIP is not just a simple life insurance policy. A ULIP plan combines a life insurance policy with long term investments ensuring your money is safely invested and grows over time. Moreover, you can choose the type of investment that you want under a ULIP plan and even change the investments in the future. 

ULIP (Unit Linked Insurance Plan) Reviews

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