Thursday, February 12, 2009

Important Things to Look at Before Buying ULIPS


Ulips are complicated products, so once you have decided to buy a Ulip, you need to consider factors such as the amount of investment, the choice of either single or regular-premium plan, types of funds, and the level of protection you need. Buying such product is like having a personalized plan tailored to your specific financial needs. It is important that you evaluate your options carefully to find the right plan with the right fund to suit your needs. Here are a few things that you must consider when buying a Ulip:

@ PROTECTION COVER:The premium that you pay usually provides insurance cover for death and total permanent disability. With additional premium, you can also be covered for certain critical illnesses and other options. The death benefit payment will be the sum assured or the value of investment units at the time of claim, whichever is higher, or in some plans both.

@NET YIELD:There can be a plethora of charges in a Ulip and the impact of each is difficult to arrive at. Look for the yield based on your parameters. There are various types of fees and charges, which will reduce the value of investment and give you the net yield to make a better comparison.

@RIGHT FUND TO INVEST:You are given a choice of investing in various funds. Funds that are invested mainly in equities will involve higher risk than those invested in fixed income securities or bonds. For example, you may choose growth fund that invests in equities, a more secure fund in bonds and other fixed interest investments, or a combination of two.

@FUND SWITCHING:Should you feel that you have made the wrong choice or you would like to change the profile of your investment portfolio, you are allowed to switch your units from one investment fund to another. Insurers allow certain switches per year without any fee.

Happy investing !

This message has been posted on HMGoogleGroup by: naval puri
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