What is a ULIP product

What is a ULIP product

ULIP is sound common name in the market. It has very complicated structure thus it is little difficult to understand. Here is a better definition and description on the product ULIP for understands the product well.

ULIP the Unit Linked Insurance Plan is a product bundles with both life insurance cover and investment opportunity. Yet another word, it is a product combining life insurance cover with investing.

ULIP is a product generally provides option to select life insurance cover that required by the subscriber and giving him a chance to get profited from the investment. ULIP works like any other mutual fund schemes. A ULIP subscriber has vast option to select his/her own investment instruments upon the risk profile of the subscriber. This can be equity or debt instruments. If it an equity or equity related instruments a subscriber selected to invest, compare with any other mutual fund schemes, ULIP also not providing any guaranteed return to the subscriber.

Hence it is a plan to provide life insurance and investment opportunities to the subscriber, the policy you pay provide you not only insurance cover but, a part of the premium gets invested in specific investment funds of your choice. The funds an investor can choose between zero to 100 percent equity or full debt instruments.

A policy holder of a ULIP, you have option to decide your premium paying term, mode of payment and duration of each premium. Insurance cover that providing by ULIP would include death cover, disability and critical illness cover depends on the requirement of the policy holder.

All the charges like premium allocation, fund management, policy administration and mortality charges for you insurance get deducted time to time from the premium you are paying to against the ULIP policy.

The investment of the ULIP fund divided into units like any other mutual funds, and will be published in the newspaper time to time. In case of the death of policy holder, insurance company will give either the insurance amount of the value of the fund units, which ever is higher, to the nominee of the policy holder. Such insurance amount paying to the nominee in case the death of policy holder, will vary depends on the nature of the ULIP policy.

In a Type 1 ULIP policy, nominee will receive either the insured amount or the fund value, whichever is higher, to the nominee. In case of the ULIP is Type 2, the nominee will receive the insurance amount as well as the fund value of the ULIP.


Insurance: A Guide

"Remember kids, I have life insurance" - Adam Savage

This is a guest article from Tatyana Levin

These days one must be financially savvy. Money is not easy to come by and should be managed carefully. With the availability of tools that make it easy to keep track of current events, the stock market, and even your own money, it would be almost a crime to not utilize these tools to make the best and most informed financial decisions. Unfortunately, the more there is, the more there is to keep track of. This applies both to tracking tools and money (the small curse within the comfort of having money to keep track of).

 The savvier ones of us dabble in investments, and the savviest make their living that way. The key is that they know what to invest in. Not magically, of course; investors do a significant amount of research to learn how to optimize their portfolios, but they have the understanding.

A grossly overlooked investment is insurance. This may be because is not typically referred to as an investment with the exception of whole life insurance that has a specific investment component within it. Webster’s defines the word “invest” as a commitment of money for a return and “insurance” as a guarantee. This makes insurance the safest type of investment, because your returns are guaranteed.  But returns are not always financial in the case of insurance. They can be, if there is an unforeseen accident, but the most certain return is the feeling of security.

Now there are many different types of insurance, and what you need depends on your current situation. Obviously you only need auto insurance, found using auto insurance leads if you have a car, and you only need renter’s insurance if you rent and have possessions that you would need insured. Insurance is for those who have something to lose. With an attachment to something, either emotional of physical (or dependence, not like physically being glued to your car), comes the fear that it will be damaged or ruined in some way. For example, if your house caught on fire, you would be devastated. What would add insult to injury is not having a way to recover from this horrible disaster.

 These types of examples are not unique to this article. That is the way that insurance is sold. As they say that clichés are clichés for a reason, insurance is promoted this way for a reason.  The foundation of the concept of insurance is uncertainty, and it is the same uncertainty that is conjured up when investing.

The main difference between insurance and investment is that not having insurance creates a feeling of uncertainty while investments by nature are uncertain. Therefore, investing in insurance creates security and is the only secure investment that exists (and is legal). Getting insurance should be one of the easier financial tasks if you apply all the resources available with technological advances like smart phones.

About the Author: This article was written by Tatyana Levin, a copywriter for InsuranceFiles.com