FAQs on ULIPs

Q1. What is a Unit Linked Fund?         

 

A. Unit Linked Fund is a pool of the premiums paid by the policyholders which is invested in a portfolio of assets to achieve the fund(s) objective. The price of each unit in a fund depends on how the investments in the fund would perform. The fund is managed by the insurance companies.

           

Q2. What does a Unit stand for?   A. A Unit stands for a portion or a part of the underlying segregated unit linked Fund.

             

Q3: What is Net asset value?

  A. Net Asset Value (NAV) is the value per unit calculated in rupees.

             

Q4: What is a Fund Value and how is it calculated?           

 

A. Fund Value is the product of the total number of units under the policy and the NAV. The fund value for the purpose of claims, surrenders or any other clause stated shall be calculated on the basis of NAV.

             

Q5: What do I get at the end of my policy term?

  A. The benefit received at the end of policy term is termed as maturity benefit. The policyholder is entitled to receive fund value as maturity benefit.

             

Q6: What should I verify before signing the proposal?   A. You should verify:

           

All the charges deductible under the policy

Features and benefits

Limitations and exclusions

Lapsation and its consequences

Other disclosures

Illustration projecting benefits payable in two scenarios of 6% and 10% returns as prescribed by the life insurance council.

             

Q7: What will my family receive if something happens to me?

           

A. In the unfortunate event of death during the term of the policy, the person appointed as nominee shall receive the higher of sum assured or the fund value. There are also certain ULIPs in market which give sum of Fund value & sum assured as death benefit.

             

Q8: Is investment return guaranteed in ULIPs?

           

A. Investment returns from ULIP may not be guaranteed.