Your ULIP policy may come with additional associated charges. Please read the terms and conditions carefully before opting for ULIP. These charges could be :
- Premium allocation fee
The charge is imposed beforehand on the premium amount. It is a percentage of the premium appropriated towards charges before allocating the units under the policy. This charge normally includes initial and renewal expenses apart from commission expenses.
- Fund management fee
This is an aggregated sum of fees levied for management of the fund(s) and are deducted before arriving at the net asset value (NAV). These charges vary according to the type of fund and plan, and are borne by the insured. These charges are payable on yearly basis as a percentage, depending upon premium payment term.
- Policy administration fee
These are related to recovery of expenses borne by the insurer for maintaining the life insurance policy. These are borne by the insured on a monthly basis as a fixed sum charged on the premium amount paid.
- Mortality fee
This is an expense charged by the insurer to provide life cover to the insured, and varies with the age and sum assured, risk, etc., of the insured. These charges are deducted on a monthly basis.
- Surrender charge
This charge refers to the deduction for premature encashment of units, either partial or full. It is usually levied as a percentage of the fund value or of the annualised premiums.
- Fund-switching charge
This charge is levied while switching from one fund to another, beyond the free switches allowed in a year. The charge is applicable for each switch.
- Discontinuance charge
This charge is levied on premature discontinuation during the lock-in period.
Consumer VOICE experts compared various ULIP plans on basis of parameters like entry and maturity age , premium, fund options, maximum sum assured etc to list the best ULIP Plan.