How to read a benefit illustration of a ULIP policy?

How to read a benefit illustration of a ULIP policy?

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In today’s time, Unit Linked Insurance Plan (ULIP) is one of the finest goal-based investment option that has been designed to help you meet your long-term financial goals.  Though ULIP is an insurance plan, it provides the investors both insurance and investment under a single integrated plan. A lot of new investors have a common question, i.e. “Why should I Invest in ULIP?” The answer is that there are several benefits of investing in a ULIP plan. Higher returns, flexibility in choosing the ULIP funds, partial-withdrawal and tax-benefits are some of the major advantages of purchasing a ULIP plan. However, before you purchase an insurance policy, it is essential that you read the benefit illustration of the policy in detail.

What is benefit illustration?

A benefit illustration is a document provided with a ULIP policy that highlights the costs and benefits applicable under a ULIP plan. The common costs under the ULIP policy are policy administration charges, premium allocation charges, fund management charges, mortality charges, etc. The benefit illustration allows you to analyze how ULIP charges impact your corpus every year. Let us have a quick look to understand how to read the benefit illustration of your ULIP policy:

Have a look at the company illustrations

Several insurance companies will provide you with a company illustration when you interact with them regarding the ULIP policy. In case, the insurance company does not offer a benefit illustration, you must make it a point to ask for it yourself. The benefit illustration typically consists of all the features of a ULIP policy.

Read the illustrations in the policy

When you purchase the ULIP policy, the insurance company will attach the benefit illustration along with your ULIP insurance. This benefit illustration has to be signed by you, your insurer, as well as a third party, if any. Once you make the purchase of the ULIP policy, you will have 15 days of free lock-in period to go through the policy document.

Make a note of the digital sales figures

Nowadays, you can purchase a ULIP policy online from the comfort of your home. An online ULIP investment is transparent, convenient, as well as time-saving. When you purchase a ULIP policy online, your insurance provider would mention all the terms and conditions before directing you to the application form. You can save the benefit illustration page while purchasing an online ULIP policy

Ask for the guaranteed & non-guaranteed benefit

The insurance company would usually help you to distinguish the guaranteed and non-guaranteed benefits under a ULIP policy when you purchase it. The non-guaranteed benefit under a ULIP policy might vary, which also should be specified.

The benefit illustration of a ULIP will help you make a well-informed decision while purchasing the ULIP policy. Therefore, when an insurance company provides you a benefit illustration, you must take your time and going through it carefully. In case of any query, you must not hesitate and seek the help of a financial expert or your insurer. This will help you understand the terms and conditions of your ULIP policy carefully, thereby allowing you to avoid any inconvenience in the later stage. Before you invest in ULIP, you must compare various ULIP plans provided by different insurance providers. This will help you settle for a ULIP plan that best suits your needs. You can also calculate your estimated investment return beforehand with the help of an online ULIP calculator. This will help you select the right ULIP funds for yourself, thereby allowing you to achieve your long-term financial goals with ease.

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