It is a type of life insurance product that includes life cover as well as an investment option. Both these benefits have some charges attached to them and it is important to understand the following charges before purchasing the ULIP: Premium Allocation charge. Policy Administration charge. "The online or 4G ULIPs have very low or no charges at all. Premium allocation and policy administration charges … HDFC Life Click2Invest - ULIP is a online Unit linked plan in India that offers you market linked returns,charges you minimally ,provides your family with valuable financial protection and best meets your investment needs. Unit Linked Insurance Plans. Click here to find the tax, long-term & other types of benefits to make the best out of your ULIP and may more only at Moneycontrol.com. Fund management charges:Depending on the funds chosen by you, a portion of your ULIP premium is invested in various equity funds, debt funds or a mix of both. The charges will be reduced from your premium amount and remaining amount is used for buying units. Also, the insurer may levy some extra charges to compensate for the additional risk the investment assumes under the Type 2 policy. Type 2-Unit Linked Insurance Plans. Premium Allocation Charges – Under this ULIP plan you need to pay premium allocation charges. Ulip’s are not an ideal plan for you if you are planning to buy it post touching 50 as high mortality charges will exhaust all the investment value. Lock-in period of a ULIP? Fund Management Charges (FMC): Investors often consider the premium charged as a key factor to identify the best ULIP plans for their budget. This is deducted from the premium upfront. ULIP investments are best suited for individuals with a long term financial plan of wealth creation and insurance. We help you understand the key charges that tag along with ULIPs. This battle raged prominently in the case of unit linked insurance plans, or ULIPs, for years. Know the charges in your ULIP. Costs associated with ULIPS There are mainly five charges associated with a Ulip plan. Choose a Fund as per your Risk Appetite There are a variety of funds to invest in as per the risk portfolio in a unit linked plan. More importantly, these charges are often not plainly communicated to the policy buyers. However, Ulip being a combination of a life insurance policy and a mutual fund, both of which are long term investments, should be held for 15 years or more. However, ULIP as a single product saves much of operational efforts. Get Top Performing ULIP Fund (2019)in India. A Ulip insurance plan comes with a lock-in period of five years. The Fund Management charge is for managing these investments in order to offer you potentially higher returns. Whether it is for retirement, children’s education or for other financial goals, a ULIP investment continued till maturity works as an advantage. 15th Jun 2018; 10,500; Share; In addition to traditional plans like endowment and money back life insurance policies, you may consider buying a Unit Linked Insurance Plan (ULIP). Under Type 2 Unit Linked Insurance Plans, your nominee or the beneficiary will receive the sum of both Fund Value and Sum Assured in case of your death. The morality charges depend upon sum assured and the unit fund value. 1) Premium allocation charge. However, in addition to factoring in the premium, you also need to take the fund management charges into account if you’re interested in finding a unit-linked plan that’s affordable. The allocation charges for online policy is 1.5% and for offline it is 3.3%. 5. Mortality charge. ULIPs help you meet two of your most important financial needs - Protection and Savings. 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