Buy a Life Insurance Plan in a few clicks
Insurance and Investment in one plan.
A plan that works like a term plan, and Earns like ULIP Plan
Thank you
Our representative will get in touch with you at the earliest.
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/492
A ULIP (Unit Linked Insurance Plan) is a financial product that combines life insurance with investment opportunities. It is essential to understand what is ULIP as it offers policyholders the dual benefit of protection and market-linked growth. In ULIP, a portion of the premium goes towards life coverage, while the rest is invested in funds such as stocks and bonds. ULIPs also provide tax-saving advantages and the flexibility to switch between funds, making them a popular choice for long-term financial planning.
A Unit Linked Insurance Plan (ULIP) is a financial product that combines life insurance coverage with market-linked investment opportunities. It allows policyholders to secure their family’s future while simultaneously growing their wealth through investments in equity, debt, or hybrid funds.
When you pay a ULIP premium, a portion of it is allocated towards life insurance, ensuring financial protection for your loved ones. The remaining amount is invested in market-linked funds, which can be chosen based on your risk appetite and financial goals.
As per a simple ULIP definition, ULIP is a financial product that combines insurance and investment. So this is how ULIP works: when you buy a ULIP, the premiums you pay are divided into two parts. One part ensures life insurance coverage, while the other is invested in funds of your choice, such as equity, debt, or hybrid funds. These investments are professionally managed by fund managers to help them grow over time. You also have the flexibility to switch between funds depending on your financial goals or market conditions. At maturity, you receive the total value of your investments, providing both protection and wealth creation.
Example:
If you invest ₹1,00,000 per year in a ULIP, the premium is split as:
After 10 years, based on different fund choices:
At maturity, you receive the fund value, and in case of an unfortunate event, your nominee gets the higher of the fund value or sum assured (₹10 lakh).
When you know what is ULIP means, it is important to understand its benefits. ULIP plan is a one-time investment plan with tax benefits. But, in addition to tax benefits, it also has several other benefits that make the idea of investing in ULIPs a lucrative option. Let us look into some key advantages of this plan:
One of the key advantages of ULIPs is the flexibility they offer in choosing the life cover amount. Policyholders can select a life cover that aligns with their financial goals and risk appetite. Whether it is a modest cover for basic protection or a substantial cover to provide for dependents’ future needs, ULIPs allow customization according to individual requirements.
ULIPs provide investors with the flexibility to choose their preferred investment type based on their risk tolerance and investment objectives. They typically offer a range of investment options such as equity funds, debt funds, and balanced funds. Investors can allocate their premiums across these funds according to their risk appetite and investment horizon.
ULIPs offer the flexibility of partial withdrawals after the completion of the lock-in period, typically five years. This feature allows you to access funds in case of financial emergencies or to meet specific financial goals. Making partial withdrawals provides liquidity and offers greater control over your investments.
ULIPs are a valuable tool for saving with goals in mind. Whether you are planning for your child’s education, buying a house, or building a retirement corpus, ULIPs provide a disciplined approach to saving and investing. They promote consistent savings and potential long-term wealth accumulation.
ULIPs offer tax benefits under the provisions of the Income Tax Act 1961. The premiums paid towards the plan are eligible for tax deductions under Section 80C, subject to certain limits. Additionally, the maturity proceeds and death benefits received are exempt from tax under Section 10(10D) of the Income Tax Act.
ULIPs offer the potential for market-linked returns. The investment component lets you invest in different funds. These funds invest in a diversified portfolio of stocks, bonds, or other market tools, providing a chance to earn returns based on the performance of the underlying assets.
Investing in ULIP plans meaning getting the freedom to switch between different investment funds based on their changing financial needs and market conditions. This flexibility lets investors align their investment plans with their risk tolerance and investment horizon.
ULIPs offer the potential for wealth creation over the long term through exposure to equity and debt markets. By staying invested for the recommended investment horizon and adopting a disciplined approach to regular premium payments, investors can benefit from market growth and potentially earn higher returns compared to traditional insurance products.
Choosing the best ULIP requires thorough research, understanding financial goals, and considering various factors. By selecting a ULIP that aligns with your investment objectives, risk tolerance, and insurance needs, you can make the most of this hybrid product and work towards achieving your financial aspirations. Here are some key points to keep in mind when selecting a ULIP:
Start by researching different ULIP providers in the market. Look for reputable insurance companies with a strong track record and good customer reviews. Compare the features, benefits, charges, and performance of different ULIP plans these providers offer. This will help you shortlist the options that align with your investment and insurance needs.
The first step in selecting a ULIP is to identify your investment goals and objectives. Whether you aim for long-term wealth creation, retirement planning, or education funding, choose a ULIP plan that aligns with your investment horizon and risk appetite.
Before choosing a ULIP plan, assess your financial goals, risk appetite, and investment horizon. If you seek higher returns and can handle market fluctuations, equity-oriented ULIPs may be ideal. For those prioritizing stability and capital preservation, debt-oriented or balanced ULIPs offer a more secure investment option.
Assess the historical performance of the funds offered within the ULIP plan. Look for consistent and competitive fund performance across various market cycles. Analyze factors such as fund management expertise, asset allocation strategy, and investment philosophy before making a decision.
Understand the various charges associated with ULIPs, including premium allocation charges, policy administration charges, fund management charges, mortality charges, and surrender charges. Compare the charges across different ULIP plans and choose one with transparent and reasonable fee structures.
Look for ULIP plans that offer flexibility in terms of premium payment frequency, premium redirection, fund switching, and partial withdrawals. Assess the availability of diverse investment fund options and the ease of making changes to your investment portfolio as per your evolving financial needs.
While ULIPs primarily serve as investment vehicles, they also provide life insurance coverage. Review the insurance coverage offered by the ULIP plan, including the sum assured amount, riders, and additional benefits. Ensure that the insurance coverage adequately meets your family’s protection needs.
Opt for ULIP plans offered by reputable insurance companies known for their transparency and disclosure practices. Review the policy documents, terms, and conditions carefully to understand the product features, charges, benefits, and exclusions. Look for clear and concise disclosures to make an informed decision.
Calculate the appropriate life insurance cover amount based on your financial obligations, such as outstanding loans, future expenses, and income replacement needs. Choose a ULIP plan that offers a sufficient sum assured amount to provide comprehensive financial protection to your loved ones in your absence.
Take advantage of the tax benefits available under Sections 80C and 10(10D) of the Income Tax Act, 1961. Premiums paid towards ULIPs qualify for tax deductions under Section 80C up to a specified limit. Additionally, the maturity proceeds and death benefits received from ULIPs are tax-exempt under Section 10(10D), subject to certain conditions.
1. Not Aligning with Financial Goals – Ensure your ULIP aligns with long-term objectives like retirement, wealth creation, or child education.
2. Overlooking Charges & Fees – Understand costs like premium allocation, fund management, and surrender charges to avoid reduced returns.
3. Ignoring Fund Performance – Check historical fund performance and choose funds that match your risk appetite and goals.
4. Withdrawing Too Early – Exiting immediately after the 5-year lock-in can limit wealth creation; ULIPs work best when held for 10-15 years.
5. Not Reading Policy Terms – Always review details like lock-in period, fund switching limits, and maturity benefits to avoid surprises.
Investing in ULIPs (Unit Linked Insurance Plans) offers several advantages, making them an appealing option for individuals seeking a balanced mix of insurance coverage and investment opportunities. There are numerous comparisons between ULIP vs mutual funds and other investment instruments. Here, let’s explore why ULIPs can be an excellent investment:
One of the primary reasons people invest in ULIPs is their dual advantage. A ULIP not only provides life insurance but also allows you to invest in market-linked funds. The ULIP meaning lies in its ability to offer both protection and wealth accumulation. It’s ideal for those who want to secure their family’s future while also growing their wealth over time.
ULIP plans come with a wide range of investment options. Whether you’re looking for equity funds, debt funds, or balanced funds, ULIPs allow you to pick funds that match your risk tolerance. You can adjust your portfolio as your financial goals evolve, making it a flexible investment product.
ULIPs are also an attractive option for tax-saving. The premiums paid for ULIPs qualify for tax deductions under Section 80C of the Income Tax Act 1961. Furthermore, the maturity proceeds and death benefits are exempt from tax under Section 10(10D), making it a tax-efficient choice.
ULIPs are designed for long-term investors. With a lock-in period for ULIP of five years, these plans are built to benefit those who are willing to stay invested and allow their investments to grow over time, making them suitable for retirement planning or saving for a child’s education.
The funds in which your ULIP premium is invested are linked to the market. As a result, you can enjoy market-linked returns based on the performance of the underlying assets. This means your investment has the potential for higher returns compared to traditional insurance products, such as endowment or whole-life policies.
Whether you are someone who wants to closely monitor your investments or an individual with varying risk profiles, ULIPs have something to offer for everyone. Let us explore which investor class ULIPs are most suited for:
ULIPs are ideal for individuals who prefer to have a hands-on approach to their investments. With ULIPs, investors have the flexibility to track the performance of their investment portfolio through regular statements and online portals. These statements provide detailed insights into the fund value, investment returns, and associated charges, allowing investors to monitor their investments closely and make informed decisions.
ULIPs are well-suited for individuals with a medium to long-term investment horizon. Since they invest in market-linked funds, they are designed to generate higher returns over the long term. By staying invested in ULIPs for an extended period, investors can benefit from the power of compounding and market appreciation, thereby maximizing their investment returns and achieving their long-term financial goals.
ULIPs cater to individuals with varying risk profiles by offering a range of fund options to choose from. Whether you are a conservative investor looking for stable returns or an aggressive investor willing to take higher risks for potentially higher returns, ULIPs provide fund options across the risk-return spectrum. Investors can select funds based on their risk tolerance and investment objectives, thereby customizing their investment portfolio to suit their individual risk profiles.
ULIPs cater to investors at all life stages, from young professionals to those nearing retirement. For young investors, ULIPs help build long-term wealth while supporting financial goals like buying a home or retirement planning. As life circumstances change, ULIPs offer flexibility to adjust investments based on evolving financial needs, ensuring they remain a relevant and effective choice throughout one’s lifetime..
These plans are structured in a way that allows policyholders to invest their premiums in various market-linked funds while providing them with life insurance coverage. Let’s delve into the structure of ULIP plans to understand how they work:
These plans are structured in a way that allows policyholders to invest their premiums in various market-linked funds while providing them with life insurance coverage. Let’s delve into the structure of ULIP plans to understand how they work:
The structure of a ULIP plan begins with the premium payment made by the policyholder. Premiums can be paid either as a lump sum (single premium) or at regular intervals (regular premium). The premium amount is divided into two components: one for providing insurance coverage and the other for investment purposes.
Once the premium is paid, it is allocated between the insurance and investment components of the ULIP plan. A portion of the premium goes towards providing life insurance coverage, while the remaining amount is invested in various funds chosen by the policyholder.
ULIPs offer multiple investment fund options, including.
The ability to switch between funds allows investors to adjust their portfolios based on market performance and personal financial objectives.
The funds within a ULIP plan are managed by professional fund managers appointed by the insurance company. These fund managers make investment decisions and actively manage the portfolio to achieve optimal returns for the policyholders. Fund performance is closely monitored, and investment strategies are adjusted based on market conditions and investment objectives.
Now that all the myths around what is Unit Linked Insurance Plan, how it works, and what benefits it offers, it is time to know who should invest in these excellent investment tools. Let us take a quick look:
ULIPs are best suited for long-term investors who are willing to stay invested for a minimum of 10 years. This allows them to ride out market fluctuations and benefit from the power of compounding.
Those Seeking Insurance and Investment Combined
ULIPs offer both insurance coverage and investment opportunities. If you are looking for a product that provides life cover as well as market-linked returns, ULIPs might be suitable for you.
ULIPs can be tailored to meet specific financial goals such as children’s education, retirement planning, or buying a house.
Since ULIPs invest in the market, they are subject to market risks. Investors willing to take on market risks for potentially higher returns could consider ULIPs.
ULIPs offer tax benefits under Section 80C and Section 10(10D) of the Income Tax Act. The premium paid is tax-deductible up to ₹1.5 lakh under Section 80C, and the maturity proceeds are tax-free under Section 10(10D).
ULIPs offer a combination of investment growth and tax savings under the Income Tax Act, 1961. Understanding these tax benefits can help investors maximize returns while reducing tax liabilities. Here’s how you can claim tax benefits on your ULIP:
Under Section 80C, the premiums paid towards a ULIP plan are eligible for a tax deduction. The maximum deduction available is ₹1.5 lakh per annum. So if you invest in a ULIP, you can reduce your taxable income by the amount of premium you pay up to the limit prescribed by the law.
The maturity proceeds from a ULIP are exempt from tax under Section 10(10D), provided certain conditions are met. This makes ULIPs an attractive option for tax-savvy investors who wish to grow their wealth without worrying about taxes on returns.
If the policyholder passes away, the death benefit received by the nominee is also tax-exempt under Section 10(10D). This ensures that your loved ones are financially protected and the amount they receive from the ULIP will not be taxed.
It is important to note that to avail of the tax benefits under Section 10(10D), the premium paid should not exceed 10% of the sum assured, as per the recent amendments. Additionally, the policy must have been in force for at least five years.
Maximizing returns is essential, but it should be balanced with your risk tolerance and financial goals. It is vital to consider the charges, terms and conditions, and investment horizon of the ULIP before implementing any strategies. You can aim to maximize the potential returns from your investment by following the given strategies:
Start investing early to allow your money to grow and provide enhanced returns. Assess your risk tolerance and goals to determine the right fund for your ULIP. Generally, equity funds have higher growth potential but come with higher risk, while debt funds offer stability but lower returns. Consider diversifying your investments across funds to balance risk and returns.
ULIPs work best when held for the long term. Investors can profit from the power of compounding and sustain short-term market fluctuations by staying invested throughout the policy tenure.
It is essential to regularly monitor the performance of the chosen investment funds within ULIPs. Keep track of market trends and fund performance, and make informed decisions regarding fund switches based on the market conditions and your investment goals.
To minimize risk and maximize rewards, diversification is essential. Choose a plan for balancing your assets by investing in various equities, debt, and other funds. This strategy can maximize returns while reducing the effects of market volatility.
Consulting a financial advisor or insurance expert can provide valuable insights and guidance in maximizing returns on your ULIP. They can assess your risk profile and investment goals and provide personalized recommendations based on their expertise.
Leverage the tax benefits available under the Income Tax Act 1961 by investing in ULIPs. Premiums paid towards ULIPs qualify for tax deductions under Section 80C up to a specified limit. Additionally, the maturity proceeds and death benefits received from ULIPs are tax-exempt under Section 10(10D), subject to certain conditions. Maximize tax savings to enhance your overall returns from ULIPs.
A ULIP (Unit Linked Insurance Plan) comes with a mandatory lock-in period of 5 years, during which policyholders must stay invested before accessing their funds. During this period, partial withdrawals, policy surrender, or fund redemptions are restricted, and early exits may attract surrender charges or penalties imposed by the insurer.
The 5-year lock-in ensures disciplined investing, allowing the funds to grow and generate market-linked returns over time. However, even after the lock-in period, staying invested for the long term—10 to 15 years—can maximize wealth creation and provide better returns.
With their unique features, ULIPs offer policyholders flexibility, transparency, and the potential for wealth accumulation. Let’s delve into the distinctive characteristics that make ULIPs a popular choice among investors seeking both protection and growth.
ULIPs offer the flexibility of making a single premium payment upfront. This option allows investors to make a lump-sum investment and enjoy the benefits of both insurance coverage and investment growth immediately.
Alternatively, ULIPs also offer the option of regular premium payments, allowing investors to spread their investment over time. Policyholders can choose to pay premiums annually, semi-annually, or even on a monthly basis, depending on their convenience and financial capability.
ULIPs provide flexibility in selecting the number of premium-paying years. Policyholders can opt for a limited premium payment term, wherein they pay premiums for a fixed number of years while the coverage continues for a longer duration. This feature allows investors to tailor their premium payment schedule according to their financial goals and cash flow requirements.
One of the primary features of ULIPs is their dual nature, combining life insurance coverage with investment options. A portion of the premium paid towards ULIPs goes towards providing life cover ensuring financial protection for the policyholder’s family in case of unfortunate events. Simultaneously, the remaining portion is allocated towards various investment funds, allowing policyholders to grow their wealth over time.
ULIPs offer policyholders the flexibility to choose from a range of investment funds based on their risk appetite, investment objectives, and market outlook. These funds typically include equity funds, debt funds, and balanced funds, each catering to different risk profiles. Policyholders can switch between funds or reallocate their investments according to changing market conditions or personal preferences, providing adaptability to their investment strategy.
ULIPs offer transparency in terms of costs, charges, and investment performance. Insurance companies provide detailed information about the various charges associated with ULIPs, including premium allocation charges, policy administration charges, fund management charges, and mortality charges. Additionally, policyholders have access to regular updates on the performance of their investment portfolio, enabling informed decision-making.
ULIPs come with a mandatory lock-in period, which is the minimum duration for which the policyholder must stay invested in the plan before making partial withdrawals or surrendering the policy. The lock-in period for ULIPs is typically five years, ensuring a long-term investment horizon and fostering disciplined investing habits.
These fund options encompass various asset classes, such as equities, debt instruments, and liquid assets, providing investors with flexibility and customization. Let’s delve into the different fund options available under ULIPs:
Hybrid funds, also known as balanced funds, combine both equity and debt instruments within a single investment portfolio. These funds aim to provide a balanced approach to investment by diversifying across asset classes. Hybrid funds are suitable for investors seeking a moderate level of risk and potential for capital appreciation, along with some stability from debt investments.
Equity funds predominantly invest in stocks or equities of companies listed on the stock market. These funds are suitable for investors with a higher risk appetite and a long-term investment horizon. Equity funds have the potential to deliver higher returns over the long term, albeit with higher volatility. They are well-suited for investors seeking capital appreciation and willing to tolerate fluctuations in the market.
Debt funds primarily invest in fixed-income securities such as government bonds, corporate bonds, and other debt instruments. These funds offer relatively lower risk compared to equity funds and are ideal for investors looking for stability and regular income. Debt funds provide steady returns over the medium to long term and are suitable for conservative investors or those nearing retirement who prioritize capital preservation.
Liquid funds invest in short-term money market instruments such as treasury bills, commercial papers, and certificates of deposit. These funds offer high liquidity and stability, making them suitable for investors with short-term investment horizons or those seeking to park surplus funds temporarily. Liquid funds provide relatively lower returns compared to equity or debt funds but offer greater capital safety and liquidity.
Balanced funds, also known as asset allocation funds, maintain a balanced allocation between equity and debt instruments. These funds aim to provide investors with a combination of capital appreciation and income generation while managing risk through diversification. Balanced funds are suitable for investors seeking a middle-ground approach, offering moderate risk with the potential for steady returns over the long term.
Like any financial product, ULIPs entail certain charges that policyholders need to be aware of. Let us explore the various charges associated with ULIPs:
The insurance company levies Policy Administration Charges to cover the costs of administering the ULIP policy, including policy issuance, servicing, and record maintenance. These charges are deducted on a periodic basis, typically monthly, and may vary across different ULIP products and insurers.
Fund Management Charges are fees charged by the insurance company for managing the investment funds under the ULIP. These charges cover the costs incurred in managing the investment portfolio, including research, analysis, and portfolio management.
When policyholders opt to switch their investment funds within the ULIP from one fund option to another this charge is applicable. Insurance companies may impose a fee for each fund switch beyond the free switch limit specified in the ULIP policy. Switching Funds Charges vary across insurers and ULIP products.
Surrender Charges, also known as discontinuance charges, are levied by the insurance company in case the policyholder surrenders or discontinues the ULIP policy prematurely, i.e., before the completion of the lock-in period. These charges are deducted from the surrender value of the policy and may vary depending on the surrender period and the duration for which the policy has been in force.
Mortality charges are associated with the life insurance component of ULIPs and are deducted to provide life coverage to the policyholder. These charges are based on factors such as age, gender, health condition, and sum assured, and they ensure that the insurance company can fulfill its obligation of paying the death benefit to the nominee in the event of the policyholder’s demise.
This charge is deducted upfront from the premium paid by the policyholder before the allocation of units to the chosen funds. These charges cover the initial expenses incurred by the insurance company, including sales and distribution expenses, underwriting costs, and agent commissions. Premium Allocation Charges reduce the amount of premium allocated towards investment, thereby affecting the initial investment corpus.
When policyholders opt to make partial withdrawals from their ULIP policy before the completion of the lock-in period, this charge is levied. Insurance companies may impose a fee for each partial withdrawal beyond the free withdrawal limit specified in the ULIP policy. Partial Withdrawal Charges vary across insurers and ULIP products.
ULIPs, like any other investment option, have their fair share of myths and misconceptions. It is vital to separate fact from fiction to make informed decisions. This can be done by conducting thorough research, seeking professional advice, and carefully reading policy papers. Individuals can make well-informed decisions regarding their investment and insurance needs by dispelling such myths. Let us debunk some common ULIP myths:
One of the prevalent misconceptions about ULIPs is that they are expensive because of the various charges that accompany them. While it is true that ULIPs have fees such as premium allocation fees, policy administration charges, mortality fees, and fund management costs, it is important to realize that these fees are required to cover the costs associated with managing investment funds and providing insurance coverage. However, over time, these fees tend to have less effect and may even be outweighed by the possible profits from the investment component.
Another misconception about ULIPs is that they offer a lesser return on investment than other investment options like mutual funds. The returns from ULIPs are market-linked and subject to market fluctuations. They are based on how well the policyholder’s chosen underlying investment funds perform. If the funds perform well, ULIPs have the potential to generate significant returns over the long term.
Some people believe that ULIPs lack liquidity and have a lock-in period. Although ULIPs do have a five-year lock-in term as required by Insurance Regulatory and Development Authority of India (IRDAI) regulations, they provide partial withdrawal possibilities once the lock-in time ends. Policyholders can use the money they receive from these partial withdrawals to cover any unforeseen costs or financial difficulties. Additionally, the lock-in period promotes long-term investing, which may result in higher returns.
It is widely believed that ULIPs are secretive and that investors have no idea where their money is being put. However, ULIP providers are obligated to disclose details regarding the investment funds, their goals, past performance, and asset allocation strategy. Furthermore, policyholders often receive statements and updates on the fund’s performance, fees, and investment value. It is essential to read and understand the policy documents to gain complete clarity about the ULIP and its workings.
Another myth is that ULIPs are primarily meant for insurance coverage and not as investment vehicles. While ULIPs do provide life insurance coverage, they also offer investment opportunities. The investment component of ULIPs allows individuals to allocate their premiums to different funds. The policyholder has the flexibility to switch funds and manage their investment portfolio to maximize returns. ULIPs provide a combination of insurance and investment, making them suitable for individuals looking for both financial protection and wealth creation.
A ULIP Calculator is an online tool provided by insurance companies to help individuals estimate their premium amount, life cover, and potential returns based on their financial goals, risk appetite, and investment horizon. It simplifies the decision-making process by offering instant calculations tailored to different ULIP plans, including retirement, child education, and wealth creation.
Using a ULIP premium calculator is simple and involves the following steps:
The ULIP calculator works in the following manner:
The first step in using the ULIP calculator is to select the type of ULIP investment that you wish to go ahead with. There are various types of ULIPs available, you can pick between regular or one-time investment. Each fund has its investment strategy and risk profile. You can choose the fund that best suits your investment goals and risk appetite.
Once you have selected the type of ULIP, the next step is to enter the premium amount that you wish to invest. The premium amount is the amount that you will pay regularly for the duration of the policy.
Add the interest rate per annum
Enter the term or tenure for which you wish to opt the ULIP policy for.
The ULIP calculator or ULIP maturity amount calculator will use the premium amount, policy term, and other factors to estimate the returns on your investment. The returns will depend on the fund’s performance and market conditions. The ULIP return calculator will provide a detailed analysis of the returns, including the expected return on investment.
By using a ULIP return calculator, investors can compare different plans, adjust their investment preferences, and make informed decisions to maximize their wealth.
ULIPs are a powerful financial tool that offers the dual advantage of insurance coverage and investment growth. The various benefits of ULIP mentioned in the blog showcase how ULIPs allow you to diversify your portfolio and offer a reliable opportunity to build wealth and attain financial stability at the same time. By harnessing the benefits of ULIPs and adopting sound investment strategies, investors can confidently navigate their financial journey and achieve their desired milestones.
Individuals have different financial objectives and risk tolerances; therefore, it is crucial to remember that before making investment decisions, one must consider their situation and consult financial counselors. With the right approach and a clear understanding of important provisions like ULIP renewal individuals can embark on a path toward economic prosperity and peace of mind.
1
A ULIP, or Unit Linked Insurance Plan, is an investment-cum-insurance product that combines life insurance coverage with investment options. It works by allowing policyholders to invest their premiums in a variety of funds, such as equity, debt, or balanced funds, while also providing a life cover. The premiums paid are divided into units, and the value of these units fluctuates based on the performance of the chosen funds.
2
Factors to consider when investing in ULIPs include your investment goals, risk tolerance, investment horizon, charges associated with the ULIP, fund options available, and the track record of the insurance company offering the ULIP.
3
The portion of the premium used to purchase units in a ULIP varies depending on factors such as premium allocation charges, mortality charges, and other administrative charges. The remaining amount is allocated towards providing insurance coverage and other expenses.
4
Whether ULIP is a good investment depends on individual financial goals, risk tolerance, and investment horizon. ULIPs offer the potential for wealth accumulation and insurance coverage but involve market risks and charges. Investors should carefully evaluate their options before investing.
5
ULIPs typically do not offer a refund policy once the policy is purchased. However, policyholders may have a free-look period during which they can cancel the policy and receive a refund of premiums paid, subject to certain conditions.
6
ULIP NAV, or Net Asset Value, represents the value of each unit in ULIP’s investment fund. It is calculated by dividing the total value of the fund’s assets by the total number of units outstanding.
7
To maximize ULIP returns, consider factors such as choosing funds based on your risk tolerance and investment goals, staying invested for the long term, regularly reviewing and rebalancing your portfolio, and minimizing unnecessary charges.
8
The fund value in ULIPs is calculated by multiplying the number of units held by the Net Asset Value (NAV) of the respective fund. The NAV is determined based on the value of the underlying assets held by the fund.
9
The minimum lock-in period for ULIP is typically five years, as mandated by regulatory authorities. During this period, policyholders are generally not allowed to make withdrawals or surrender the policy without incurring penalties.
10
Maturity proceeds from ULIPs are generally tax-free under certain conditions, subject to provisions of the Income Tax Act, 1961. However, it is advisable to consult with a tax advisor for personalized tax advice.
11
The right time to invest in ULIPs depends on individual financial goals, market conditions, and investment horizon. It is essential to invest when you have a long-term investment horizon and can afford to stay invested despite market fluctuations.
12
ULIPs offer the dual benefits of insurance coverage and investment growth within a single integrated plan. They provide flexibility, tax benefits, and the potential for higher returns compared to traditional insurance plans.
13
ULIPs and Fixed Deposits (FDs) cater to different financial needs and risk profiles. ULIPs offer the potential for higher returns but involve market risks, while FDs provide capital protection and guaranteed returns. The choice depends on individual preferences and financial goals.
14
ULIPs and the Public Provident Fund (PPF) serve different purposes. ULIPs offer insurance coverage and investment growth, while PPF provides tax-free returns and long-term savings. The choice depends on factors such as risk tolerance, investment horizon, and financial goals.
15
ULIP returns depend on various factors such as market performance, fund selection, charges, and investment duration. While ULIPs offer the potential for good returns over the long term, it is essential to evaluate and monitor your investments to maximize returns carefully.
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.
Grow your wealth effortlessly with our ULIP plan options now!
