Unit Linked Investment Plans (ULIPs)
The most important benefit of ULIP as opposed to conventional plans is the flexibility they give the investor to choose the premium amount and also choosing the underlying fund in which this money is to be invested. ULIPs also come with an option of lifecycle-based portfolio strategy that re-distributes your money across various asset classes (Automatic Asset Allocation) based on your life stage and risk tolerance. Thus, with this plan, the investor can look forward to a great start to realize all his/her aspirations.
An investment-linked insurance plan is a life insurance that combines investment and protection. Your premiums will buy life insurance protection as well as units in a fund of your choice, managed by ICEA Limited i.e. you choose how to allocate your insurance premiums towards protection and investment.
Like endowment plans, the benefits are paid to you or your nominee at the end of a specific period, on maturity, on surrender, if you suffer total permanent disability and/or upon your demise.
Traditional Endowment Vs ULIP
The main difference between traditional endowment and ULIP is that ULIP:
Payments will depend on the price of the units at the time of claim.
Being Investment-linked and like other types of investments, are exposed to investment risk. The unit price of an investment fund is linked to the total value of the plan, which fluctuates with the movements in the unit price. Hence, you may realize a gain or loss when you sell your units, and may even get less than what you invested. Past-performance of an investment-linked fund's track record is only a guide to future performance.
Give you flexibility and leverage to choose your own level of protection and investment, to increase your premiums and coverage when your finances improve in the future and to choose the type of funds or portfolio (ICEA Equity Fund, ICEA Money Fund, ICEA Growth Fund and ICEA Bond Fund), based on your risk appetite.
Allows you to periodically vary the amount of your premium payments (either in single or regular-premium as well as periodic premium injections) or coverage based on your own personal financial situation. The single premium allows you to immediately invest more to generate returns.
Allows you to switch funds after periodically evaluating your options carefully to find the right plan with the right fund to suit your changing needs.
