A unit-linked term insurance plan, famously known as ULIP, is what all of us go to when we are in need to secure our families after our demise. ULIP offers a combination of risk-free investment and market-based investment, depending upon the type of ULIP you choose.
It gets an edge as it carries the potential to create wealth for life assured. ULIP does this while keeping life secured in monetary terms. Liabilities are meant to be paid off and not to be carried forward. ULIP plays a major role in this as it enables the family to clear all your liabilities after your demise.
Get Maturity Benefits
Everything comes down to how many benefits your family receives from ULIP after termination or maturity. This is important to understand as a plan serves benefits based on the terms & conditions as finalized by you when you buy a ULIP
Your family, or the beneficiary, will receive the benefits either in a lump sum or in the form of a regular income. This is decided based on the ULIP that you choose. There are four ways in which you can get your maturity benefits in sizable chunks. We will review them with the help of different ULIP.
1. Return Of Premium
A common notion about ULIP is that you only get the coverage amount as the final benefit. However, if we have to paint a true picture, then we would be happier to inform you that you can also collect the premium paid during the term of the ULIP.
Smart Protect Goal Term, one of the insurance policies, ensures that your family gets the final coverage and the premium at the time of maturity. Assuming you have paid ₹25,000/- annual premium towards your ULIP for 10 years. The total amount goes to ₹2,50,000/-. Considering the inflation rate of around 5%, the amount would be enough to sustain your family for at least 12 months. This is based on a rough calculation. The duration may differ based on how much you spend and on what you spend.
This was to give you a rough idea about how important it is to receive the premium amount back in your bank account.
2. Get Sum Assured
Choose a mode, and you are all set to receive the final coverage amount. This is also referred to as the sum assured. ULIPs offer the basic option to pay your family the ultimate sum that you chose to assure at the time of buying the ULIP.
The terms and conditions are pretty straightforward in this case. Saral Jeevan Bima, a ULIP, offers a coverage amount of up to ₹25 lakh. You can choose to pay the premium at your convenience. This includes monthly, quarterly, or annually. Your family would receive the sum assured at the time when the ULIP matures or when the family becomes eligible to receive the amount. The sum assured would depend on the variant of the ULIP that you choose at the beginning. You may go with a sum assured of less than ₹25 lakh, and that would be the amount kept assured for your family.
The sum assured under a ULIP is paid to the family, or any other beneficiary, as specified in the Schedule in the Policy Document.
3. Waiver Of Premium
There is a possibility that the remaining premium amount of your ULIP may be waived by the company. This is affected by only one circumstance in which you have Accidental Total Permanent Disability. With this, you can avail of the special clause of the ULIP to get the remaining premium amount waived.
The question arises what happens to the policy. This is a valid question as the final coverage depends on how much premium you are able to during the term of your ULIP. eTouch Online lets you continue your policy even if you are unable to pay the premium amount to the company. The only point to be noted is that you must have Accidental Total Permanent Disability. Your premium is waived while the ULIP continues as per the normal terms & conditions.
The final benefits of your family are not affected under such circumstances. The sum assured is paid after your demise, and the ULIP is considered to be terminated.
4. Get Your Spouse Covered
The picture is all good when you have secured your life. It can get better when you include your life partner in the ULIP that you have chosen. The trend has changed with modern times demanding the female members of the society to go out and work in the office. The overall financial responsibility is now shared by both partners equally.
This calls for securing both lives under one ULIP. This comes in handy as you do not have to opt for two separate ULIPs. One ULIP does the work for both of you in keeping the family safe. The premium amount can be customized depending on the final coverage that you want to assure. The frequency of paying the premium remains the same. The terms & conditions of a ULIP apply to both partners. This is what iSecure offers to a couple who is jointly looking to secure their lives.
HOWEVER, the ULIP emphasizes that you got through a medical examination, especially if you are a smoker. The premium amount depends on how well your medical reports come. You are more likely to secure a better ULIP if you qualify for the category of Preferred Non-Smoker.
The entire gist can be presented by saying that it is important to calculate how much sum you want to assure under a ULIP. Consider the final payout options as well.
