6 Myths About Investing in ULIPs

Here, we clear some of myths linked to ULIPS:

MYTH 1: ULIPs are costly.

• Reality: Because of the high premium allocation and fund management charges, many people consider ULIPs as a costly investment instrument. However, this was a thing of the past. Earlier, the charges were as high as 6-10%, but now IRDAI brought down the annual charges to 3% for the first 10 years of holding and 2.25% for more than 10 years of holding. Now low cost ULIPs have charges much lower than before and are affordable to all.

MYTH 2: ULIPs are risky instruments.

• Reality: The reason that the money in ULIPs is only invested in the equity market makes it a risk instrument. However, the intensity of risk associated with ULIPs can be selected on the basis of funds with different objectives. . You can invest in a conservative fund by settling for a debt-oriented fund or opt for an aggressive fund if you are a risk-taker. It also gives you an option for selecting a mix of equity and debt fund known as a balanced fund. Additionally, you have the option of switching funds depending on your risk appetite and need of time.

  Risk assessment helps in selecting the best SIP.

MYTH 3: ULIPs are not for investing surplus funds.

• Reality: If not at the beginning, you can, at any time top up the ULIPs when surplus funds are available. The top-up premium can be paid anytime during the tenure of the existing ULIP policy and offers the same tax benefits as regular premiums.

MYTH 4: ULIPs cannot be discontinued.

• Reality: After completion of the lock-in period of 5 years, you can, at any time discontinue investing in ULIPs. In doing so, you will not be required to deposit any type of surrender charges.

MYTH 5: Life cover decreases with market volatility.

• Reality: Many people have the misconception that because ULIPs are linked to equities, the market returns affect the life cover. However, the life cover remains the same and ULIPs either pay the complete life cover or the fund value, whichever is higher, if the investor dies.

Latest ULIP NAVs

• SBI Life ULIP Funds
• HDFC Life ULIP Funds
• Axis Max Life ULIP Funds
• ICICI Prudential Life ULIP Funds
• Tata AIA Life ULIP Funds
• Bajaj Allianz Life ULIP Funds
• Aditya Birla Sun Life ULIP Funds
• Kotak Life ULIP Funds
• PNB MetLife ULIP Funds
• Canara HSBC Life ULIP Funds
• Pramerica Life ULIP Funds
• Bandhan Life ULIP Funds
• Aviva Life ULIP Funds
• Bharti AXA Life ULIP Funds
• Edelweiss Tokio Life ULIP Funds
• Future Generali India Life ULIP Funds
• Exide Life ULIP Funds
• Reliance Nippon Life ULIP Funds
• IndiaFirst Life ULIP Funds
• Ageas Federal Life ULIP Funds
• Star Union Dai-ichi Life ULIP Funds

Fund Name	NAV	AUM	5 Yr Returns	10 Yr Returns
SBI Life Balanced Fund	₹74.3	₹22439 Cr	8.69%	10.31%	View More
SBI Life Bond Fund	₹50.25	₹18103 Cr	5.24%	6.91%	View More
SBI Life Equity Fund	₹205.85	₹82996 Cr	11.89%	12.59%	View More
SBI Life Equity Optimiser Fund	₹55.95	₹2715 Cr	12.08%	12.13%	View More
SBI Life Growth Fund	₹96.25	₹3064 Cr	10.68%	11.87%	View More
SBI Life Money Market Fund	₹36.29	₹429 Cr	5.67%	6.05%	View More
SBI Life Top 300 Fund	₹58.15	₹2006 Cr	11.41%	12.93%	View More
SBI Life Pure Fund	₹26.62	₹1182 Cr	10.55%	-	View More
SBI Life Bond Optimiser Fund	₹22.45	₹3286 Cr	7.42%	-	View More
SBI Life Bluechip Fund	₹10.23	₹2655 Cr	-	-	View More
SBI Life Balanced Pension	₹74.45	₹772 Cr	9.3%	11.14%	View More
SBI Life Bond Pension	₹44.56	₹513 Cr	5.1%	7.15%	View More
SBI Life Equity Pension	₹76.68	₹11050 Cr	12.87%	13.31%	View More
SBI Life Growth Pension	₹74.91	₹608 Cr	11.18%	12.33%	View More
SBI Life Money Market Pension	₹33.55	₹131 Cr	5.62%	6.04%	View More
SBI Life Equity Optimiser Pension	₹60.08	₹947 Cr	12.12%	12.94%	View More
SBI Life Top 300 Pension	₹56.25	₹682 Cr	11.35%	12.95%	View More
SBI Life Midcap Fund	₹49.24	₹49420 Cr	19.97%	-	View More
SBI Life Corporate Bond Fund	₹16.3	₹1058 Cr	5.27%	-	View More
SBI Life Equity Elite II	₹52.88	₹12622 Cr	10.91%	11.95%	View More
SBI Life Index	₹49.73	₹115 Cr	12.51%	12.96%	View More
SBI Life Index Pension	₹51.87	₹30 Cr	12.59%	12.99%	View More
SBI Life Discontinued Policy Fund	₹25.2	₹9761 Cr	5.55%	6.11%	View More
SBI Life Equity Elite	₹90.4	₹13 Cr	14.06%	14.9%	View More
SBI Life P-E Managed	₹39.29	₹238 Cr	9.92%	10.56%	View More
SBI Life Guaranteed Pension GPF070211	₹26.34	₹3 Cr	5.05%	6.82%	View More
SBI Life Bond Pension II	₹23.3	₹29557 Cr	5.02%	6.53%	View More
SBI Life Equity Pension II	₹43.4	₹12893 Cr	12.1%	13.02%	View More
SBI Life Money Market Pension II	₹20.5	₹1553 Cr	5.37%	5.77%	View More
SBI Life Discontinue Pension Fund	₹21.27	₹6722 Cr	5.54%	-	View More
SBI Life Group Growth Plus Fund	₹57.86	₹3 Cr	9.26%	-	View More
SBI Life Group Debt Plus Fund	₹40.26	₹113 Cr	6.36%	-	View More
SBI Life Group Balance Plus Fund	₹48.54	₹11 Cr	7.51%	-	View More
SBI Life Group Balance Plus Fund II	₹26.6	₹805 Cr	7.49%	-	View More
SBI Life Group Debt Plus Fund II	₹26.1	₹227 Cr	6.34%	-	View More
SBI Life Group Growth Plus Fund II	₹27.02	₹238 Cr	9.13%	-	View More
SBI Life Group Short Term Plus Fund II	₹21.37	₹21 Cr	5.89%	-	View More
SBI Life Group Money Market Plus Fund	₹12.44	₹2 Cr	1.04%	-	View More

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MYTH 6: ULIPs do not have health and accident cover

• Reality: Since ULIPs offer insurance cover along with investment, just like any other insurance plan it too has rider options such as Accidental Death Benefit (ADB), Waiver of Premium (WOP), Family Income Benefit, Hospital Cash Benefit (HCB), etc. In case of such extremities or calamities, one can benefit from the partial withdrawals to meet their additional cash requirements.

ULIPs have been in market since long and have been offering good returns. This modern and traditional investment mix offers flexibility of switching funds along with easy withdrawal for your current requirements making it a necessary investment tool in your financial planning. If you do not wish to get into the hassles of individual planning, a ULIP with few riders may be the solution.

You may also like to read : ULIPs Are A Little Tricky But Easy To Make Good Money