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In this policy, the investment risk in the investment portfolio is borne by the policyholder.
Kotak e-Invest
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Ref. No. KLI/22-23/E-BB/492
Premium Redirection in ULIPs Plan- Premium redirection means allocating the funds from one unit to another either partially or fully. Read more on this article
Flexibility is one of the hallmark features of ULIPs. These plans let you tweak your investment strategy with changes in market conditions and financial goals. Based on your needs, you can alter your premium allocation from aggressive equities to more stable and conservative debt funds. The feature of premium redirection in ULIPs facilitates such modifications.
What does premium redirection mean?
Your insurer invests a part of your ULIP premiums into different asset types as per your tolerance for market volatilities. You can select from equity, balanced, and debt funds. The returns at the end of the ULIP tenure depend on how the funds perform during this period.
When you buy the ULIP, you have to decide the percentage of your premium you want to direct into the different fund types. However, with changing economic scenarios or financial needs, you can choose to change how you want to divide your premiums across various asset classes.
Premium redirection in ULIPs lets you alter the funds where you want to invest your future premiums. It also allows you to modify your future premium allotment percentages over the various fund types. With premium redirection, your insurer distributes your incoming investments to the different fund units in the new ratio you choose. Your earlier investments will remain in the same funds you currently hold.
When should you redirect your premiums?
To change from equity to debt funds. You can start with a growth-based investment approach. But as you reach retirement age or the time to fulfil your financial targets approaches, you may prefer to preserve your wealth. At this point, you might want to shift to low-risk debt funds.
Otherwise, the market might pass through a short-term volatile phase. Security prices might start to decrease. Under such conditions, you might want to prevent erosions to your fund value. Then you can focus your investments towards fixed-income options for better returns.
To explore better-performing funds.
You may want to start investing in new funds. But you may also want to keep your existing fund composition intact. You can then allot your upcoming premiums into new funds with premium redirection. Your current shareholdings will not change.
To exit from debt funds.
When you first venture into the capital market, you may favour a cautious approach with the security of debt funds. Otherwise, the markets might have been slow, and debt markets offered better prospects. Later, when the market bounces back, you may wish to tap into the profit-potential of equities.
Terms and conditions for premium redirections
Conclusion
Fluctuations in the capital market are usual. But premium redirection in ULIP helps you adjust your investments as per market outlooks. Thus, ULIPs provide opportunities to fine-tune investment strategies, survive slowdowns, and maximize your gains through varying market cycles.
If you want to create wealth utilizing ULIPs flexibility, you can consider the policies offered by Kotak Life Insurance. Some of the lucrative options include:
You can study the brochures detailing each policy’s advantages online and select a plan to match your investment objectives.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
In this policy, the investment risk in the investment portfolio is borne by the policyholder.
Kotak e-Invest
Features
Ref. No. KLI/22-23/E-BB/521
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
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