Changes and customizations of ULIPs are frequent and would typically be explored through the following avenues:
- The insured is at liberty to set the sum assured amount at inception; some ULIPs allow you to increase this amount over the term of the plan.
- Flexibility to change premium amount: Most programs give allowance to change the premium amount after a preset period. Further, many plans have a top-up feature that allows policyholders to invest more through their policies and maximize on their investment returns
- Flexibility to choose your fund option; at the point of inception and after preset intervals after that is a feature that comes with most ULIPs. You have the option to select between conservative funds, aggressive funds or a combination of the two to your preferred choice
The insurance company is obligated to share with you information on how your premium is utilized, what portions are deducted for charges, how the policy will grow about the selected sum assured. A minimum two scenarios, 6 % & 10 % return rate, are used. Service providers will also supply you with brochures and a key features document for more information about the plan.
Disciplined Savings Mechanism
Investing in ULIPs provides a long term logical investment choice, a prudent way to save for particular objectives; unlike ordinary savings, where the savings are often derailed from their intended purpose in the event of an emergency.
When you invest in ULIPs, you stand to enjoy tax benefits for your: Life insurance and Health insurance plans, eligible for deduction under Section 80C, and Life insurance plans and critical illness riders, eligible for deduction under Section 80D of the Income Tax Act. Additionally, section 10(10D) exempts the proceeds at maturity or withdrawals of life insurance policies from taxation.
By investing in ULIPs you combine wealth creation to risk management, most providers often supply information on the performance of your different funds, thereby enhancing the value of your investment. These reasons are sufficient for anyone to buy a ULIP.