UTI ULIP is a good investment option which give its buyer the insurance cover in addition to the returns on the amount invested. Further the amount invested here is also available as deduction u/s 80C of the Income Tax Act. The plan has two terms: 10 years or 15 years. So if you choose to invest 10 lakh ( called Target Amount) for 10 years then you have to pay a premium of 1 lakh each year for 10 years and this premium is allowed as deduction u/s 80C (subject to the upper limit of 1 lakh). Now this target amount will also be your Life Insurance Cover. The UTI will pay the premium for this life cover to LIC under the group insurance plan. After deducting the premium paid to LIC from the annual amount contributed by you, you will be allotted the ULIP units at the current NAV. Ex: If you deposit 1 lakh each year and the UTI paid the insurance premium of say Rs 500 to LIC and the NAV of one unit of ULIP is say Rs 20 then you will be allotted (100000-500)/20=4975 units.
You can opt from two types of insurance cover:
• Declining Term Insurance
• Fixed Life Insurance
Declining Term Insurance : In our example, since your target amount is Rs. 10 lakhs, that’s your insurance cover and you pay Rs. 1 lakh every year for 10 years.
Your insurance amount is what you haven’t paid to them yet. So, if you paid one year worth of instalment which equal Rs. 1 lakh then your insurance cover is Rs. 9 lakhs. Now in the second year you paid another 1 lakh ( Total 2 lakhs), now your insurance cover will be 8 lakhs and so on.
Nothing is payable on death within 6 months of buying the policy.
You only get half of what’s due if death occurs between 6 and 12 months of taking the policy.
Fixed Term Insurance : This insurance plan works like the normal term insurance plan where the target amount becomes your insurance cover and is paid upon death. The conditions of 6 months and 1 year is applied here also.
Investment Criteria: The UTI will invest this corpus in debt oriented scheme. It can also invest in equity market but upto 40% of the amount of corpus.
Returns: The fund page shows that it has returned 10.87% since inception, 3.88% in 2011-12, 8.81% in 2010-11 and 35.87% in 2009-10, which are fairly good numbers. The plan doesn’t pay out any dividend as they re-invest the amount back in the fund.
Maturity bonus: There is a maturity bonus where you get 5% of the target amount on the maturity of a 10 year plan, and 7.5% of the target amount on the maturity of a 15 year plan.
Expert View : As per our view this is a good investment plan that will also cater to your insurance needs in addition to the returns it will generate over the period and you don’t have to buy an insurance plan separately .
You can opt from two types of insurance cover:
• Declining Term Insurance
• Fixed Life Insurance
Declining Term Insurance : In our example, since your target amount is Rs. 10 lakhs, that’s your insurance cover and you pay Rs. 1 lakh every year for 10 years.
Your insurance amount is what you haven’t paid to them yet. So, if you paid one year worth of instalment which equal Rs. 1 lakh then your insurance cover is Rs. 9 lakhs. Now in the second year you paid another 1 lakh ( Total 2 lakhs), now your insurance cover will be 8 lakhs and so on.
Nothing is payable on death within 6 months of buying the policy.
You only get half of what’s due if death occurs between 6 and 12 months of taking the policy.
Fixed Term Insurance : This insurance plan works like the normal term insurance plan where the target amount becomes your insurance cover and is paid upon death. The conditions of 6 months and 1 year is applied here also.
Investment Criteria: The UTI will invest this corpus in debt oriented scheme. It can also invest in equity market but upto 40% of the amount of corpus.
Returns: The fund page shows that it has returned 10.87% since inception, 3.88% in 2011-12, 8.81% in 2010-11 and 35.87% in 2009-10, which are fairly good numbers. The plan doesn’t pay out any dividend as they re-invest the amount back in the fund.
Maturity bonus: There is a maturity bonus where you get 5% of the target amount on the maturity of a 10 year plan, and 7.5% of the target amount on the maturity of a 15 year plan.
Expert View : As per our view this is a good investment plan that will also cater to your insurance needs in addition to the returns it will generate over the period and you don’t have to buy an insurance plan separately .
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