A Unit-Linked Insurance Plan or ULIP is a type of life insurance product that not only provides life coverage to the policy buyer, but also serves as an investment option, wherein the policyholder is given the choice to invest in stocks, mutual funds, or bonds. Thus, with a ULIP, you can avail a life cover as well as earn returns for your investment on a regular basis.
However, one thing to remember is that since the returns offered by ULIPs are market-linked, you will have to bear the risk of your investments. Thus, make sure to only pick funds that suit your appetite for risk. That being said, ULIPs are an attractive option for many policy buyers since they can help in long-term wealth creation. Listed below are 6 unit-linked insurance plans that are offered by life insurance firms with the highest claim settlement ratios for FY16-17.
1. LIC’s New Endowment Plus Plan: The New Endowment Plus Plan from LIC is a non-participating, unit-linked, endowment assurance policy that is designed to provide both an insurance cover and serve as an investment option to the policy buyer. This policy provides flexibility to the policyholder and helps in long-term savings. The details of this policy are mentioned below.
Key Features of LIC’s New Endowment Plus Plan:
- If the policyholder succumbs to an untimely death during the policy tenure, a death benefit will be paid to the nominee. The death benefit will be the higher of the sum assured or the fund value.
- If the policyholder survives until completion of the policy term, he/she will receive the fund value of the policy.
- Policy buyers can also purchase LIC’s Linked Accidental Death Benefit Rider along with this policy.
- The minimum age at entry for this policy is 90 days and the maximum age at entry is 50 years.
- The minimum and maximum maturity ages are 18 years and 60 years, respectively.
- Policy buyers can opt for any policy tenure between 10 years and 20 years.
- The insurer offers four types of fund options to policy buyers.
2. Max Life Fast Track Super Plan: The Fast Track Super Plan from Max Life Insurance is a unit-linked, non-participating insurance policy. This plan provides comprehensive protection to policyholders and also offers 6 investment funds. Listed below are the key details of this policy.
Key Features of Max Life Fast Track Super Plan:
- Policyholders can make two free partial withdrawals annually after the completion of the 5-year lock-in period.
- If the policyholder succumbs to an untimely death, either the fund value or the sum assured will be paid to the nominee, based on whichever is the higher of the two amounts.
- The total fund value will be paid as the maturity benefit. This amount can be paid as a lump sum or as monthly instalments for a period of 5 years.
- Policyholders will also receive guaranteed loyalty additions from the 11th policy year onwards.
- In order to purchase this policy, individuals must be over the age of 18 years.
- The maximum maturity age for this policy is 70 years.
3. HDFC Life Click2Invest ULIP: The Click2Invest ULIP is an online policy offered by HDFC Life that provides comprehensive coverage and attractive market-linked returns. This policy is ideal for individuals who wish to achieve their financial goals and have sufficient funds for the key milestones in their lives.
Key Features of HDFC Life Click2Invest ULIP:
- This policy comes with a range of premium payment options such as the Single Pay, Regular Pay, 5 Pay, 7 Pay, and 10 Pay options.
- The insurer offers 8 fund options to policyholders.
- In order to avail the coverage provided by this policy, the life assured is required to be 30 days or older. The maximum age at entry is limited to 65 years.
- Policyholders can avail the protection provided by this policy up to 75 years of age.
- Prospective customers can opt for a policy term ranging between 5 years and 20 years.
- Policyholders can make partial withdrawals from the policy fund after 5 policy years, provided that they are over the age of 18 years.
- The plan offers a death/maturity benefit to the policyholder/nominee, based on the eventuality.
4. Aegon Life iInvest Insurance Plan: The iInvest Insurance Plan from Aegon Life is an online, non-participating, unit-linked insurance policy that offers customers the dual benefits of an investment-cum-protection financial tool. A unique feature of this policy is that the insurer invests 100% of the premiums paid by the policyholder, thus helping customers receive high returns throughout the policy tenure.
Key Features of Aegon Life iInvest Insurance Plan:
- If the policyholder succumbs to an untimely death during the policy term, the nominee will receive either the total fund value, the sum assured, or a sum equal to 105% of all premiums paid, based on whichever is the highest of the three.
- At maturity of the policy, the policyholder will receive the fund value of the policy.
- If a customer opts for a policy tenure of 15 years, 20 years, or 25 years, he/she will be eligible to receive loyalty units during the last 5 years of the policy term.
- Individuals between 7 years and 55 years can purchase this policy. The maximum maturity age for this policy is 70 years.
- The insurer does not levy a Premium Allocation Charge for this policy.
- Policy buyers are offered 6 investment fund options by the insurer.
- Policyholders can choose between two portfolio strategies to manage their investments.
5. SBI Life – Smart Wealth Builder Plan: The Smart Wealth Builder Plan from SBI Life Insurance is a non-participating, unit-linked insurance policy. This plan offers a comprehensive life cover to the policyholder along with a range of fund options and guaranteed additions, thus increasing the returns earned from the policy.
Key Features of SBI Life – Smart Wealth Builder Plan:
- Guaranteed additions will be paid to the policyholder starting from the 10th policy year. Policyholders who opt for a long policy tenure will be eligible to receive higher guaranteed additions.
- Policy buyers are offered up to 7 fund options to invest in.
- A policyholder needs to be a minimum of 7 years to avail policy coverage. For Regular and Limited Premium Policies, the maximum age at entry is capped at 60 years. For Single Premium Policies, the maximum age at entry is 65 years.
- The maximum maturity age is 70 years for this policy.
- The nominee is eligible to receive a significant payout if the policyholder succumbs to an untimely death. This payout will be the highest of the sum assured, 105% of the overall premiums paid, or the fund value.
- A maturity benefit will be paid to the policyholder at the completion of the policy tenure.
- No Premium Allocation Charge will be levied from the 11th policy year.
- Policy Administration Charges will not be levied for Regular and Limited Premium Policies during the first 5 policy years.
6. ICICI Pru LifeTime Classic Plan: The LifeTime Classic Plan from ICICI Prudential Life Insurance offers enhanced protection to the policyholder, thereby providing financial security to one’s dependents. Further, the insurer also offers 9 investment funds with varying risk profiles.
Key Features of ICICI Pru LifeTime Classic Plan:
- The insurer offers policyholders the option to make changes to their investments in a hassle-free manner.
- Policyholders are given the freedom to make unlimited partial withdrawals from the fund starting from the 6th policy year, provided the overall withdrawal amount does not exceed 20% of the policy’s fund value in a given year.
- Policyholders are also eligible to receive loyalty additions and wealth boosters.
- The insurer will pay the nominee a death benefit upon the policyholder’s death. If the policyholder survives until the end of the policy term, a maturity benefit will be paid to him/her.
- This policy comes with a lock-in period of 5 years.
- Policyholders can make enhancements to the sum assured at the policy anniversary, at any time during the policy tenure.
In conclusion, a unit-linked insurance policy is your best bet if you are looking for a life insurance product that will also help you increase your wealth substantially over a period of time. However, when it comes to ULIPs, it is vital that you only pick a fund after assessing your financial needs and your appetite for risk.
Also, before you purchase an insurance policy for yourself or your loved ones, make sure to always compare a few different plans either through independent insurer websites or by way of a third-party insurance comparison website. Further, ensure to check the pricing of each policy to ensure that you are purchasing a plan with adequate coverage at a fair price.