What Is The Additional Premium On A ULIP?

Apr 30, 2018 | 2 years ago | Read Time: 2 minutes | By iKnowledge Team

A higher investment made today can go a long way in creating a big corpus at a later stage. A top-up allows you to contribute towards a Unit Linked Insurance Plan (ULIP), so that you earn more from a well-performing ULIP. However, let’s cover a few details before you avail a top-up:

  • Sum assured

The sum assured is the minimum benefit offered under a ULIP policy. It is defined as a percentage of the total premium paid till the policy matures. The sum assured increases when you pay a top-up premium. However, additional benefits will depend on your age during top-up and not the age when you first invested in the ULIP.

  • Lock-in period

A lock-in period is a minimum period of holding an investment. Some insurers keep a lock-in period of 5 years on the top-up premium invested in the ULIP.  A ULIP is a long-term product. Staying invested for a long time can help you earn more from a ULIP. However, there could be situations in your life where you need money to meet an emergency. You may consider surrendering the ULIP including the top-up premium but won’t be able to do so if there is a lock-in period. Therefore, you must know the lock-in period associated with each top-up premium.

  • Charges

Fees associated with a ULIP may appear to reduce your contribution towards the investment, you need to look at it from a broader perspective. For example, a mortality charge applies on a top-premium. It depends on the age of the policy subscriber. Even though you may have purchased the policy a few years ago, the mortality charge will be applicable as per your age during the top-up.

  • Conditions

A top-up option allows you to make the most from a well-performing ULIP fund. A quick look in the terms and conditions of an existing ULIP contract will help you know more.  For example, some ULIP plans may not allow you to avail a top-up option in the last 5 years of the policy. You may want to consider or discuss this aspect with your insurance provider before investing.

Aegon Life offers a ULIP known as the iMaximize Plan. It offers investment options as well as risk cover. You can choose from six different funds that invest in equities in varied proportions with a top-up facility. The minimum top-up premium with iMaximize is Rs. 5,000 and you also have an option of investing in a top-up five year before the plan matures.

Conclusion

A top-up premium allows you to increase the invested corpus as well as the risk cover.  The mortality charge applied on the ULIP depends on your age while availing the facility. You can read all about your ULIPs contract online before availing the top-up and stay informed.

To know about AegonLife’s life insurance products like health insurance , visit our home page.

Advt. no.: IA/Apr 2018/3897


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