IN UNIT LINKED INSURANCE POLICIES, INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

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What is a ULIP?

 

A Unit Linked Insurance Plan (ULIP) is a life insurance plan with an additional feature of investing your money in the market for future financial goals. This means that you get the dual benefit with ULIP plan of protecting your family as well as securing your future. To ensure you fulfil your financial goal, you need first choose the right plan suited for your needs.
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How Does A Unit Linked Insurance Plan Work?

A Unit Linked Insurance Plan (ULIP) is a market-linked product. This means that along with providing you with a life cover, your investment is diversified in the open market and the returns are incidental to the market performance, helping you in generating better maturity benefits in the long term.

 

In a ULIP, there is a death benefit which is the amount payable to the nominee in the event of death of the policyholder during the policy term. The policyholder will receive a maturity benefit if he or she survives the term of the ULIP.

 

Investments in ULIP plan can be customized to your preferences. You can choose the funds to invest in based on your risk appetite. Investors seeking lower risk may opt for debt funds while equity investments are desired by investors with higher risk.

 

Moreover, premium amount paid is eligible for tax benefits³ under Section 80C.

What are Death and Maturity Benefits in a ULIP?

Death Benefits
Death Benefits
Death benefits of ULIPs are offered in case of unfortunate demise of the policyholder.
Maturity Benefits
Maturity Benefits
Maturity benefits on ULIP plan are offered to policyholders when the policyholder survives beyond the maturity period. Maturity benefits are equal to the amount of fund value.

Benefits of Investing in a ULIP

Flexibility:

ULIPs let you choose the premium amount, as per your requirements. They also give you the option of selecting funds as per your choice. One can opt for a ULIP policy based on their financial goals and risk appetite.

Liquidity:

No matter what your premium paying term or policy term is, after the lock-in period of 5 years, you can fully or partially withdraw funds from your account when you are in need of urgent funds.

Systematic Savings:

ULIPs give you the benefit of putting aside a chunk of your income and save it for future use.

Wealth Accumulation:

ULIP plan not only let you save your earnings, but also help in growing wealth by allocating it to market-linked funds.

Tax Benefit u/s 80c:

Premiums paid are deductible from taxable income under Section 80C. The maturity amount received is also exempt subject to conditions under Section 10(10D) of the Income Tax Act, 1961.

Why Should You Buy a unit linked insurance plan (ULIP)?

Saving for Future Goals
Saving for Future Goals
When it comes to fulfilling future goals such as buying a new home, child’s education, retirement planning etc., savings are a must. Without long term savings plans, it is difficult to balance short term needs and future goals. ULIPs help you save systematically and help you plan for these future goals.
Family’s Protection
Family’s Protection
ULIP is a life insurance plus investment plan that offers a life cover to the policyholder. In case of an unfortunate death, the dependant family of the policyholder will still be financially secured.
Provides Tax Benefit
Provides Tax Benefit³
All premiums are eligible for tax deduction³ under section 80C. The maturity amount received is also exempt subject to conditions under Section 10(10D) of the Income Tax Act, 1961.
Savings & Investments
Savings & Investments
ULIPs give you the advantage of switching between funds depending upon their performance. This helps you to get a better maturity benefits³ on your invested amount by monitoring the growth.
Saving for Future Goals
Saving for Future Goals
When it comes to fulfilling future goals such as buying a new home, child’s education, retirement planning etc., savings are a must. Without long term savings plans, it is difficult to balance short term needs and future goals. ULIPs help you save systematically and help you plan for these future goals.
Family’s Protection
Family’s Protection
ULIP is a life insurance plus investment plan that offers a life cover to the policyholder. In case of an unfortunate death, the dependant family of the policyholder will still be financially secured.
Provides Tax Benefit
Provides Tax Benefit³
All premiums are eligible for tax deduction³ under section 80C. The maturity amount received is also exempt subject to conditions under Section 10(10D) of the Income Tax Act, 1961.
Savings & Investments
Savings & Investments
ULIPs give you the advantage of switching between funds depending upon their performance. This helps you to get a better maturity benefits³ on your invested amount by monitoring the growth.

Two Main Reasons Why You Should Invest in an ULIP Early On

The Power of Compounding
The Power of Compounding
The biggest benefit of starting early is the power of compounding which provides the foundation for time value for money. Even if you invest a small amount for several years consistently, it will grow into a large corpus.
Balanced Investment Portfolio
Balanced Investment Portfolio
Investing with ULIP offers a balanced investment portfolio which means that you get a mix of financial plans that can fulfil the future needs. This attempts to balance risk versus rewards by adjusting and rebalancing asset in an investment portfolio.

Two Main Reasons Why You Should Invest in an ULIP Early On

The Power of Compounding
The Power of Compounding
The biggest benefit of starting early is the power of compounding which provides the foundation for time value for money. Even if you invest a small amount for several years consistently, it will grow into a large corpus.
Balanced Investment Portfolio
Balanced Investment Portfolio
Investing with ULIP offers a balanced investment portfolio which means that you get a mix of financial plans that can fulfil the future needs. This attempts to balance risk versus rewards by adjusting and rebalancing asset in an investment portfolio.

Steps to Buy ULIP Online

  • Step 1 :  Choose your plan 
  • Step 2 : Choose your premium and policy term

     

  • Step 3 : Make Payment 

    You can opt from monthly, half-yearly or yearly mode of payment and choose from a list of payment options such as:
    Credit Card
    Debit Card
    Netbanking
    Online Wallets

     

How can you save tax³ by investing in a ULIP?

 

As with all life insurance plans, the amount invested in a ULIP is available for tax benefits³. This follows from the income tax provision that 'any sum paid to keep in force' a life insurance policy can be claimed as a deduction³. Hence, you can even include the extra components like service tax, etc., that have been paid to the insurer.

 

Tax Benefits³ under Section 80C

 

The amount invested in a ulip is eligible for a deduction³ under Section 80C. The maximum amount that is eligible for the deduction³ is Rs.1, 50, 000.

 

Tax Benefits³ under Section 10(10D)

 

The maturity amount in a unit linked insurance plan (ULIP) is fully excluded from Income Tax under Section 10(10D). When the premium paid is more than 10% of the sum assured for policy issued after 1st April 2012 or more than 20% for policies issued prior to 1 April 2012, the maturity amount received from ULIP policy is fully taxable.

 

 

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How does a ULIP plan work?

Unit linked insurance plans are insurance plans which combine the benefits of diversification of equity investments with the benefit of life insurance in one plan. These plans provide market-linked returns along with life insurance coverage. They are very flexible and considerably stable. You can check the fund performance of any fund and you can change the fund(s) you want to invest in, as per your wish and risk appetite

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What is minimum lock in period for ULIP?

ULIP plan comes with a lock-in period of five years. A lock-in period is the timeframe, i.e., five years, when the policy holder cannot withdraw or liquidate the value of the fund that has been accumulated. After the ULIP lock in period, partial or full withdrawals can be made depending upon the specific ULIP. 

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What are tax benefits³ provided by Unit Linked Insurance Plan (ULIP)?

Unit Linked Insurance Plan (ULIPs) also provide tax saving benefits³ as per the Income Tax Act, 1961. You get dual tax benefits³ with ULIP plan. For example, with Edelweiss Tokio Life - GCAP you can avail tax benefit³ on the premium you pay u/s 80C and even the maturity benefits are eligible for tax exemption³ u/s 10(10D).

Below are the tax benefits³ that you can avail with a ULIP plan:

• Entry Benefit: You get tax benefit³ on the payment of your premium u/s 80C and 80CCC.
• Earning Benefit: The money growth that you get is not taxable.
• Switching Benefit: You can make the switches between the equity and debt funds without paying any tax.
• Exit Benefit: You also get tax exemption³ on the maturity amount.

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Does ULIP provide death benefit?

Like all life insurance plans, ULIP provides death benefit. The unit-linked insurance plans (ULIPs) provide both death and maturity benefits to the policyholder. As a part of death benefit, in-case of unforeseen situation, the insurance claim value will be the higher of available fund value or sum assured.

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How do I make the most out of the funds in a ULIP?

Again, that is your choice and depends on your risk-taking capacity. Always check the fund performance, see how the growth rate has been since the past few years and see all the available funds in the savings plan while you make the decision. Moreover, you do not have to worry about your decision because you can change funds unlimited number of times. There is no charge for switching funds.

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What is the difference between a ULIP and an endowment plan?

A ULIP is a market-linked investment cum insurance plan whereas an endowment plan is a life insurance policy which, apart from covering the life of the insured, helps the policyholder save regularly over a specific period of time so that he/she is able to get a lump sum amount on the policy maturity in case he/she survives the policy term. Endowment policies does not provide transparency, as there is no investment portfolio. However, ULIP plan is extremely transparent as you can track your investment portfolio.

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How to choose the best ULIP plan?

A ULIP or Unit Linked Insurance Plan serves the purpose of both investment and life insurance under a single plan. And the net premium paid by you is further invested in any of the chosen funds – equity, balanced, debt, etc. Upon ULIP maturity, the fund value of the insurance will be as per the value of the market. In any unforeseen situation such as death, the insurance claim value will be the higher of available fund value or sum assured.

Here is the quick guide to choose best ULIP plan to meet your financial goals:

1. Select best ULIP Fund Options as Per Your Goals
2. Opt. for Required Amount of Life Insurance Cover
3. Know the ULIP Charges
4. Check-out the Tax Benefits³
5. Check-out the Features of ULIPs
6. Stay Invested for a Long Term with ULIPs for the best returns
A best ULIP plan will be a perfect solution to secure your future financial goals.

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What is the difference between a Term plan and a ULIP ?

A term plan gives your nominee the life cover amount in case of the policyholder’s demise. But if the policyholder outlives the policy term, he will not receive any benefits. In a ULIP, which is an investment plan, you get a certain amount of maturity benefits based on the funds you have invested in, after the investment period. But if you expire before your policy term, your nominee will get the fund value up to that point

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0 - Provided the premium paying term is more than or equal to 10 years.
3 - As per provisions of Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.


The Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender/withdraw the monies invested in Linked Insurance Products completely or partially till the end of the fifth year.


Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. Please know the associated risks and the applicable charges from your Personal Financial Advisor or the Intermediary or policy document of the Insurer. The premium paid in unit linked life insurance policies are subject to investment risk associated with capital markets and the unit price of the units may go up or down based on the performance of investment fund and factors influencing the capital market and the policyholder is responsible for his/her decisions. 

 

Edelweiss Tokio Life – Wealth Secure+ is the name of the Unit Linked, Non-Participating, Individual, Life Insurance Plan. UIN: 147L062V01

Edelweiss Tokio Life – Wealth Plus is the name of a Unit Linked, Non-Participating, Individual, Life Insurance Plan. UIN: 147L055V03

Edelweiss Tokio Life – Wealth Gain+ is the name of a Unit Linked, Non-Participating, Individual, Life Insurance Plan. UIN: 147L061V02

ARN No : WP/1435/Feb/2021