The rapid growth of the ULIP market in India

should be seen as quite natural and

expected and the accelerated movement is
in pace with the global scenario.

Mr C.S. Rao, IRDA chief.

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Presentation Overview
What is ULIP?

How is it beneficial?

Features of ULIP

Funds of ULIP

Charges under ULIP

ULIP vs Mutual Fund

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 ULIP
Unit Linked Insurance
Policy

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What is ULIP?

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Unit Linked Insurance Policies (ULIPs) as an investment
avenue are closest to mutual funds in terms of their structure and
functioning. As is the case with mutual funds, investors in
ULIPs are allotted units by the insurance company and a net
asset value (NAV) is declared for the same on a daily basis.
Similarly ULIP investors have the option of investing across
various schemes similar to the ones found in the mutual funds
domain, i.e. diversified equity funds, balanced funds and debt
funds to name a few. Generally speaking, ULIPs can be termed
as mutual fund schemes with an insurance component.

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 How does ULIP work?
The unit-linked plans work as under:

The premium paid by the client, less any charges to be deducted, is used to buy
units in the fund selected by the client at that day's unit price. So more units are
added to the client's account each time he pays a premium. If the unit price on
that day is relatively high the client gets less number of units and if the unit price
is relatively low then he gets more number of units.

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 How does ULIP work?

In order to pay the regular monthly costs an equivalent numbers

of units are cancelled and are computed as cost to be deducted
divided by unit price on that day.

The value of the fund depends on the unit price, which in turn is
determined from the market value of the underlying assets as
seen under.
Thus, Fund Value = Unit Price x Number of Units

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 Benefits of ULIPs
ULIP is life insurance solution that provides
for the benefits of protection and flexibility in
investment. The investment is denoted as units
and is represented by the value that it has
attained called as Net Asset Value (NAV). As
times progressed the plans were also
successfully mapped along with life insurance
need to do retirement planning. In today's
times, ULIP provides solutions for insurance
planning, financial needs, financial planning
for children's future and retirement planning.

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 Features of ULIPs
Life Protection
Investment and savings
Adjustable Life cover
Investment options
Options to take additional riders
Transparency
Flexibility
Tax Planning

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 Funds under ULIP

Liquid/Cash Fund
Bond Fund
Balanced Fund
Equity Fund
Midcap Fund

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 Charges under ULIP

1) Mortality Charges
2) Premium Allocation Charges
3) Sales and administration expenses
4) Fund management charges (FMC)

Other Charges
a) Switching Charges
b) Top-up Charges
c) Cancellation Charges

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 ULIP Vs Mutual Fund
Parameters ULIP Mutual Fund
ULIP gives life cover benefit to the
Life Cover No Life Cover under Mutual Funds
customers in the form of sum assured
Different types of entry loads.Charges are
Entry Load Very low entry load of 2-2.5 %
initially huge
Lock-in Minimum 3 Years No lock in for MF.ELSS is an exception
Compusion of Minimum 3 years premium need to be
No such compulsion in mutual fund
investing paid
Fund option Different fund options under one plan No such fund option
Switching Option to switch across funds No such option
Top-up facility Available Not available
Asignment Available Not available
Tax Benefit U/S 80C and 10(10D) Only 10(10D).80C under ELSS

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