What is the meaning of ULIP?

ULIPs or Unit Linked Insurance Plans are market-linked investment tools that offer a combination of investment and life cover. As a policyholder, you also have the flexibility and choice of funds to invest your premiums.

What tax benefits are offered under a ULIP?

ULIP offers tax benefits under section 80C of the Income Tax Act, 1961 to an individual for the premiums paid subject to the conditions/limits specified therein. The death and maturity benefits received from a ULIP is exempted under section 10 (10D) of the Income Tax Act, 1961, subject to the conditions specified therein. Where the amount paid to the policyholder is not exempt under the provisions of section 10(10D), the said amount will be subject to tax deduction at source by provisions of section 194DA of the Act.

What is the NAV of ULIP?

In Unit Linked Insurance Plans, the insurer invests the premium in either equity or debt market or both, in a fund you choose. Each fund has a specific value associated with it, known as Net Asset Value (NAV). The NAV is subject to change daily and is calculated once every business day.

What do you mean by the sum assured in ULIP?

Sum Assured is the amount that the insurer (in this case, Future Generali) agrees to pay your nominee on the occurrence of a stated contingency (for example, death).

What is the Maturity Benefit of a ULIP?

The benefits that you receive on the completion of the policy term are known as Maturity Benefits. On completion, Future Generali ULIPs pay you the fund value (the market value of the investment) as Maturity Benefits.

How can I track my Fund Value?

In case you need to know the NAV (Net Asset Value) of your funds to calculate the total Fund Value of your investment, Future Generali offers you the option to log in securely into the customer portal and view the fund value under the policy.

If I’m not satisfied with the returns, can I surrender my ULIP?

You may choose to surrender the policy at any time during the Policy Term. If you opt to surrender the policy before the expiration of the Lock-in-Period of 5 years, Future Generali will deduct Discontinuance Charges and transfer the accumulated fund value to the Discontinued Policy Fund. After that, the proceeds of the surrendered policy will be accumulated at the minimum guaranteed interest rate of 4% (the rate is subject to change as per directives from the IRDAI) in the Discontinued fund and will be paid to you immediately upon the expiration of the 5-year Lock-in period. It is advisable to continue with the ULIP policy as during the initial years, the policy may not yield expected returns, given the high allocation charges of the policy. If you opt to surrender after the expiry of Lock-in-Period of 5 years, fund value shall be paid to you immediately.

Do I need to apply for a bank loan against the ULIP plan?

You cannot borrow a loan against the ULIP policy. However, Future Generali offers you the option of Partial Withdrawals, wherein you can take out some amount from the accumulated fund value after five years from the commencement of the policy. In a policy where Life to be Assured is minor, partial withdrawals are allowed only once the minor turns 18.

How is the calculation done for Death Benefit for a ULIP plan?

In case of your untimely demise, during the Policy Term, your nominee or beneficiary would receive the highest of the following benefits (depending upon whether you have purchased Type 1 or Type 2 ULIP):

- Fund Value under the Policy

- Sum Assured (after deducting Partial Withdrawals if any)

- 105% of total premiums paid till the date of death

How can I differentiate between maturity benefit and death benefit?

Insurance companies pay out maturity benefit when the ULIP policy has completed its tenure, and the policyholder has survived the policy term. Therefore, you will receive the fund value along with loyalty additions (if any) in the form of maturity benefits, provided you have paid all premiums timely. On the other hand, the death benefit is paid out to your nominee or beneficiary, in case of your unexpected demise during the policy tenure. Therefore, the death benefit would be paid as the highest of the following values:

- Fund value under the policy

- Sum assured (after deducting Partial Withdrawals if any)

- 105% of total premiums paid till date of death

What are the various riders?

ULIPs from Future Generali offer additional benefits in the form of Riders that can help you customise the plan efficiently to align it with your present and future needs. Various Riders that can be added to ULIPs include: Future Generali Linked Accidental Death Rider (UIN: 133A025V01)

This add-on provides an additional insurance cover in case of death resulting from an accident. The cover amount will be paid to your family. You can avail this rider under the following plans from Future Generali:

FUTURE GENERALI BIMA ADVANTAGE PLUS

FUTURE GENERALI DHAN VRIDHI

FUTURE GENERALI WEALTH PROTECT PLAN

Future Generali Linked Accidental Total & Permanent Disability Rider (UIN:133A026V01)

This add-on plan provides an additional insurance cover in case of total and permanent disability resulting from an accident. The cover amount will be paid on confirmation of total and permanent disability. You can avail this rider under the following plans from Future Generali:

- FUTURE GENERALI BIMA ADVANTAGE PLUS

- FUTURE GENERALI WEALTH PROTECT PLAN

Are investment plans risk-free?

The fund options under the ULIP plans are subject to changes and risks of the capital market. This happens since part of the premium paid is shifted towards providing life cover, while the remaining amount is invested in a variety of funds as per your choice and risk appetite. For example, equity funds are subject to high market risks and promise higher returns; therefore, equities are suitable for those individuals who seek capital appreciation and have a high-risk appetite. On the other hand, debt investment funds are suitable for individuals who seek long-term capital preservation. Given the fact that ULIPs invest in capital market-linked instruments and stock-market linked investment tools including bonds and mutual funds, the risk associated from fund to fund. Moreover, since the policyholder bears the risk, you need to carefully analyse your goals and risk appetite before investing.

Can I withdraw my investments?

ULIP plans from Future Generali offer you the benefit of partial withdrawals, wherein you may take out some amount from the accumulated Fund Value within the policy tenure. However, this benefit can only be availed after the completion of the lock-in period - five years from the inception of the policy.

Can you describe the lock-in period for ULIPs?

Lock-in period is described as the period in which you cannot make any withdrawals or liquidate the accumulated fund value. If you opt to discontinue the policy before the completion of its lock-in period, Future Generali shall transfer the fund value to a discontinued policy fund after deducting surrender charges. After that, you will be paid the accumulated fund value only once the lock-in period completes.

What is fund switching in ULIP?