Unit Linked Insurance Plans

Unit linked insurance plan is insurance solution which offers for benefits of the risk protection as well as the flexibility in the investment. An investment is referred to the units. It represents by a value which it has achieved named as NAV that is Net Asset Value. A policy value can vary at any time according to a value of an underlying asset.

In a unit linked insurance plans the premiums invested amount after subtracting for every charge and the premium for the risk cover in every policy in the specific fund as selected by a policy holder are joint together to make the unit fund. The unit is a component of a fund in the unit linked insurance plan.

In unit linked insurance plans the return depends on the fund performance in capital market. The investors of the unit linked insurance plan have an option to do the investment in many schemes that is balanced funds, diversified equity funds, debt funds and many more. The investor can invest as the lump sum or with premiums on the monthly, quarterly, half yearly or annual basis. Investors can also alter a premium amount throughout the policy term as if you have surplus fund then you can add it in the plan or if you are facing with the liquidity crunch then you have an option to pay the lower amount and difference will be adjusted in a collected value of your unit linked insurance plan. Sahara India life insurance company provides unit linked plans.

The expenses charged in the ULIP:

Mortality charge: This charge is for a cost of the insurance coverage. It depends on many factors like age, state of the health, amount of the coverage, etc.

Administration charge: The charge is for the plan administration. It is taxed by the cancellation of the units.

Service tax deductions: The service tax will be subtracted from a risk portion of a premium.

Fund management fees: The fees charged for the management of a fund. It is subtracted before arriving to Net Asset Value.