Questions You Should Ask Before Investing In ULIP

Even ULIPS has undergone many changes in their charges and structure when SEBI intervened some years back. The version of ULIPs offered today is revamped and offers some of the best benefits. Investing in ULIPs has never been so gratifying as it is today and you, as an investor stand the chance to reap the benefits.

Though investing in a ULIP is good, there are certain things you should know or rather some questions you should ask before you invest in a ULIP. Are you investing in a ULIP blindly? What are the questions you should ask? Let us see –

Is the Plan Suitable for Your Requirement?

The most important question is whether the plan fits your financial goals. Though a ULIP provides flexibility in the form of partial withdrawals, such withdrawals are allowed only after 5 years. Moreover, though the returns in a ULIP are good, holding the plan for a longer tenure is important to achieve such returns. So, measure the plan against your financial requirements before you buy.

What are the charges?

A few years back when SEBI had not intervened, ULIPs had colossal charges deducted from the premium which resulted in very low yields. Thanks to the changes made, ULIPs now have a very low charge structure that maximizes returns. Charges under a ULIP are in the form of Premium Allocation charge, fund management charge, mortality charge, administrative charge, etc. Though the other charges are inevitable, many plans do not levy the premium allocation charge. So, study the charge structure of the plans available and buy one with the lowest charges.

What is the Coverage Available?

The determination of the Sum Assured under ULIPs depends on the amount of premium paid by the policyholder. The premium coverage is expressed as a multiple of the annual premium or single premium paid. The multiple allowed varies from plan to plan and so assess the coverage available in the plan under consideration.

What are the Historic Returns of the Portfolio?

A ULIP provides good returns by virtue of diversification. The funds available in the plan have a diversified portfolio comprising of multiple companies. Since ULIPs are subject to market risks and the returns are not guaranteed, it is important to check the historical returns generated by the funds so far. This would give you an estimated, though not accurate, the trend of returns generated and expected.

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	₹73.34	₹22084 Cr	8.63%	10.26%	View More
SBI Life Bond Fund	₹50.23	₹17457 Cr	5.24%	6.88%	View More
SBI Life Equity Fund	₹200.24	₹83975 Cr	11.74%	12.49%	View More
SBI Life Equity Optimiser Fund	₹54.84	₹2728 Cr	11.92%	12.08%	View More
SBI Life Growth Fund	₹94.27	₹3040 Cr	10.52%	11.78%	View More
SBI Life Money Market Fund	₹36.35	₹434 Cr	5.68%	6.04%	View More
SBI Life Top 300 Fund	₹57.07	₹2025 Cr	11.3%	12.87%	View More
SBI Life Pure Fund	₹25.83	₹1192 Cr	10.13%	-	View More
SBI Life Bond Optimiser Fund	₹22.32	₹3285 Cr	7.36%	-	View More
SBI Life Bluechip Fund	₹9.97	₹3014 Cr	-	-	View More
SBI Life Balanced Pension	₹73.51	₹807 Cr	9.18%	11.09%	View More
SBI Life Bond Pension	₹44.56	₹526 Cr	5.11%	7.13%	View More
SBI Life Equity Pension	₹74.8	₹11823 Cr	12.72%	13.24%	View More
SBI Life Growth Pension	₹73.37	₹634 Cr	11.01%	12.24%	View More
SBI Life Money Market Pension	₹33.6	₹138 Cr	5.63%	6.04%	View More
SBI Life Equity Optimiser Pension	₹58.7	₹989 Cr	11.87%	12.87%	View More
SBI Life Top 300 Pension	₹55.23	₹716 Cr	11.26%	12.9%	View More
SBI Life Midcap Fund	₹47.42	₹52995 Cr	19.67%	-	View More
SBI Life Corporate Bond Fund	₹16.3	₹1049 Cr	5.27%	-	View More
SBI Life Equity Elite II	₹51.9	₹12638 Cr	10.86%	11.92%	View More
SBI Life Index	₹48.57	₹112 Cr	12.28%	12.87%	View More
SBI Life Index Pension	₹50.7	₹30 Cr	12.38%	12.9%	View More
SBI Life Discontinued Policy Fund	₹25.23	₹9697 Cr	5.58%	6.09%	View More
SBI Life Equity Elite	₹88.79	₹13 Cr	14%	14.87%	View More
SBI Life P-E Managed	₹38.68	₹231 Cr	9.73%	10.53%	View More
SBI Life Guaranteed Pension GPF070211	₹26.37	₹3 Cr	5.08%	6.83%	View More
SBI Life Bond Pension II	₹23.3	₹29479 Cr	5.03%	6.51%	View More
SBI Life Equity Pension II	₹42.38	₹12763 Cr	12.03%	12.98%	View More
SBI Life Money Market Pension II	₹20.53	₹1549 Cr	5.38%	5.76%	View More
SBI Life Discontinue Pension Fund	₹21.29	₹6566 Cr	5.56%	-	View More
SBI Life Group Growth Plus Fund	₹57.21	₹3 Cr	8.93%	-	View More
SBI Life Group Debt Plus Fund	₹40.17	₹113 Cr	6.34%	-	View More
SBI Life Group Balance Plus Fund	₹48.23	₹11 Cr	7.49%	-	View More
SBI Life Group Balance Plus Fund II	₹26.43	₹809 Cr	7.46%	-	View More
SBI Life Group Debt Plus Fund II	₹26.02	₹232 Cr	6.33%	-	View More
SBI Life Group Growth Plus Fund II	₹26.73	₹240 Cr	9.02%	-	View More
SBI Life Group Short Term Plus Fund II	₹21.38	₹21 Cr	5.9%	-	View More
SBI Life Group Money Market Plus Fund	₹12.44	₹2 Cr	1.03%	-	View More

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What are the Flexibility Conditions?

ULIPs find favor with investors due to the flexibility they provide, offering features such as switching between funds, partial withdrawals, premium redirection, and top-up facilities, and asset allocation improves the best SIP investment outcome when used thoughtfully alongside these options. A ULIP has ample scope of flexibility, but while every plan provides these features, they are subject to certain conditions. For instance, there is usually a cap on the frequency of free switches and a limit on free partial withdrawals. Therefore, it is important to find out the exact limits of free facilities in the plan you are considering buying so that the flexibility aligns with your long-term investment needs.

Are There Any Extra Benefits Available?

Gone are the days when ULIPs provided death and maturity benefits. Nowadays, insurers are increasingly providing the features of guaranteed additions and loyalty additions which add a fixed percentage of returns to the existing fund value at certain intervals. More and more plans are promising these benefits and they should also form a part of your consideration when you are buying a ULIP.

Final Thoughts

These questions usually take care of any and every query you might have when you are investing in a ULIP plan. You should not invest solely based on the plan’s promotional campaign or at the behest of your agent. Ask these questions and compare the multiple plans available in the market. If it seems confusing to approach a broker, they have multiple plan options and are better placed in meeting your queries than your independent agent.