Disappointed with your ULIP? Here’s what to do

ULIP is an investment opportunity that allows you to make a sizeable corpus in the long run for dealing with unforeseen situations like building a retirement corpus, leaving a heritage for your children/ grandchildren, etc. It has many components to it, such as life insurance cover, investment funds, term or accident riders, etc.

So, before you chose to define your experience with your ULIP as a disappointment, here’s a list of its features that you should ensure to not have missed or utilized:

  1. Tax-saving Advantage

ULIP is one of the many financial products that enjoy the EEE duty status. This means that as a ULIP-holder, you can enjoy tax benefits during the three stages of investment, recessions, and returns.

  1. High returns

ULIP plans are known to offer higher returns as compared to other insurance products. This is substantial because, in ULIPs, the fund-handlers invest your money in different asset classes, like government bonds, debt, equity mutual funds, etc.

  1. Flexibility

ULIPs offer you immense flexibility in choosing the fund options, changing the life cover, choosing riders, and changing the premium value.

Along with choosing your investments, ULIPs also gives you the flexibility to customise your insurance protection plan by adding riders to it, such as a term rider. You can get more protection against specific situations that aren’t covered in the original plan. For illustration, if you work in a high-threat occupation, you can choose an accidental death rider or disability rider.

  1. Top-up facility

ULIPs allow you to increase the investment quantum through the top-up facility.

  1. Translucency

When you invest in a ULIP, the insurance company give you the complete details about the charges levied, the different funds where your money is invested, the returns expected on the funds, past performance of the funds, etc.

  1. Low surrender charges

You can fluently pay the surrender charges if you find yourself in such a situation where you aren’t able to pay the premiums, or the plan turns out to be not suitable for your requirements.

When shopping online, you tend to choose products with a refund option, right? This is because you have the option to return the product if it doesn’t meet your goals. The good news is that refund options aren’t just limited to lifestyle products. Unit Linked Insurance Policies (ULIPs) too, offer this option.

Can you stop your policy before its entire duration?

You can stop your policy with a surrender request. The charges for surrendering your policy vary according to the product. On surrendering your policy, you’ll get the Surrender Value, which will be equal to your fund value on the date of surrender. No payment will be made to you before the lock-in period ends. While you can discontinue your policy before the policy term, it’s judicious to stay invested for at least 10 times to enjoy your policy’s maximum benefits.

Can you seek a refund of premiums if I’m not satisfied with the policy?

As the policyholder, you can seek a refund of premiums if you’re displeased with the policy. You can do this within fifteen days of receipt of the policy document. This is the free look period.

You will be offered a refund, subject to the deduction of certain charges. This includes stamp duty, medical examination charges and proportionate risk premium for the period of cover.

Can you switch funds after purchasing a ULIP?

ULIP plans allow you to switch funds. This is possible through a feature known as fund switching. For illustration, if you have invested heavily in equity funds, you can switch to debt funds. This way, you can cover your investment and maximize your returns.

ULIP is a unique fiscal product that offers the binary benefits of protection and capital investment. The flexibility offered in the policy makes it a popular choice among guests. Don’t fret, if you have invested largely in equity funds and would like to shift to debt funds. ULIPs allow you to shift between funds as per your conditions.

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