A ULIP is a combination of insurance and saving plans and is a suitable alternative for those who want to invest their money and get life cover at the same time.
To help you get complete information about what a ULIP is, what are mortality charges, and the impact of these charges on your investment, we have brought this blog to you. So, let’s begin.
ULIP is an abbreviation for Unit Linked Insurance Plan. Buying a ULIP scheme is like killing two birds with one stone as this plan helps the buyer in building a corpus of money along with being financially covered for unfortunate events, such as the demise of the insured.
Regular premiums are paid in a ULIP scheme, which is split into two parts:
Another special feature of this plan is that it is handled by professionals, which means that the chances of obtaining substantial profits are high and that too, with low-risk exposure.
There are several other benefits of buying a ULIP, some of which are:
Apart from paying premiums, there are also some other ULIP charges, such as mortality charges, that you need to pay at the time of buying a Unit Linked Insurance Plan.
Mortality charges are an additional charge levied by the insurance companies on the ULIP scheme to cover the cost of insurance protection they provide.
Suppose a person has bought a Unit Linked Insurance Plan with a sum insured of ₹10,00,000 and the annual premium to be paid is ₹1,20,000, out of which, ₹50,000 goes for life insurance.
After 3 years, the insured dies due to some disease. At this time, the fund value will be lower than the sum insured but the insurer will be liable to pay the whole of it. For this reason, the mortality charges are levied.
Mortality charges affect a ULIP investment greatly as it changes the amount you need to pay as the premium.
The age, occupation, living location, and health status of the insured all these factors impact the rate of mortality charges, which in turn, influences your investment amount.
The higher the sum insured, the higher the mortality charges. So, it can be said that your ULIP investment partially depends upon the mortality charges levied by your insurance company.
There are a few ways through which it can be ensured that you pay the least possible mortality charges in ULIP. Below is a small list of them:
Buying a ULIP scheme involves many considerations. From choosing the right type of funds to invest in to having complete knowledge about what are mortality charges in ULIP, this blog has covered all these points you should know.
PNB MetLife offers a wide range of Unit Linked Insurance Plans and is a one-stop solution for all your needs, be it retirement, children's education, or wealth accumulation.
Just like an insurance plan, the mortality risk in ULIPs is suffered by the insurance company.
The payment received by the nominee, in case of the demise of the insured, is called the death benefit.
Disclaimer:
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
PNB MetLife India Insurance Company Limited
Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka IRDAI Registration number 117 | CIN U66010KA2001PLC028883
Terms & conditions apply, Benefits stipulated are subject to premiums paid and policies in-force. For more details on risk factors, please read the sales brochure and the terms and conditions of the policy, carefully before concluding the sale.
Tax benefits are as per the Income Tax Act, 1961, & are subject to amendments made thereto from time to time. Please consult your tax consultant for more details.
Goods and Services Tax (GST) shall be levied as per prevailing tax laws which are subject to change from time to time.
The marks "PNB" and "MetLife" are registered trademarks of Punjab National Bank and Metropolitan Life Insurance Company, respectively. PNB MetLife India Insurance Company Limited is a licensed user of these marks.
Call us Toll-free at 1-800-425-6969, Website: www.pnbmetlife.com, Email: indiaservice@pnbmetlife.co.in or Write to us: 1st Floor, Techniplex -1, Techniplex Complex, Off Veer Savarkar Flyover, Goregaon (West), Mumbai – 400062, Maharashtra.
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