All You Need To Know About ULIP Charges

ULIP’s are a great choice when you want to make an investment that matters. When investment plans require consistency, a lot of people look to ULIP’s for their unique benefits. An insurance plan is great on its own, but the addition of investment potential brings it to an entirely new level.

Premium Allocation

A premium allocation charge takes a percentage of the money upfront from the policyholder’s premium. It is meant to cover the cost of medicals, underwriting and other fees or expenses. Once all of the medical deductions are handled, the remaining funds get invested based on the policyholder’s directions. Since the allocation of the remaining money to be invested is up to the policyholder, there is more control over where it is sent. This is why using a premium allocation charge can lead to the best life insurance policy in India.

Fund Management

A fund management expert is an important professional that ensures the policyholder gets better returns. Fund Managers are paid up to 1.35% of the fund value annually. If you’re not making good money from an investment, then a fund manager is not getting a good return on their time. It is a win-win for both sides and is one of the smartest ways to handle market-linked funds through a ULIP. The fund management charge is an important part of making your money valuable.

Policy Administration

Policy administration charges are deducted monthly, with an amount based on changing expenses. A portion of these expenses can include paperwork, services and record keeping. The charges will always reflect whatever it costs to maintain the policy. This causes some slight confusion since policy administration charges can be a flat fee or go up based on a predetermined rate. Check the fine print, since this can also include a flat fee that changes to a predetermined rate after a few years.


ULIP is more than just a regular insurance policy with investment potential. It contains plenty of options for life coverage, especially in a case where the policyholder has a sudden death. The mortality charge can cover the compensation for a family when the head of household becomes deceased. Like any life insurance policy, the amount offered is based on age, health and the current coverage amount. Newer ULIP’s give back the previous charges deducted over the course of the contract, further enhancing the amount of compensation a family can expect in their time of need.


To get great long-term investment benefits from a ULIP, there is a default lock in period of five years. When a policyholder doesn’t fulfill the five-year lock in, a surrender charge is applied. There is no set number for the charge, but it usually depends on how far in the policyholder is with the current contract. No surrender charges are applied if the contract is ended after five full paid terms.

Wrap Up

Invest better by learning more about ULIP charges. A shortcut to a brighter future exists by prioritizing your financial goals. If you have an interest in becoming an investor, ULIP is one of the best ways to make your dreams a reality.

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