Life Insurance - ULIPs

Insurance is pooling of risks. In a contract of insurance, the insurer undertakes, in consideration of a sum of money (premium), to make good the loss suffered by the insured against a specified risks such as fire and any other similar contingency of compensate the insured on the happening of a specified event such as accident or death.

The business of insurance is related to the protection of the economic values of assets.

Insurance

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Life Insurance PolicesDigital Commerce

Annuities Policy

Whole Life Policy

Endowment Policy

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. Term Policy

Term Policy and whole life insurance policies focus on risk-coverage

Endowment policy and annuities insurance policies focus on

investments

ULIPs focus on both risk-coverage and the investments

ULIP

What is ULIP ?

A category of financial solutions that combine the safety of insurance protection with wealth creation opportunitiesU: UnitL : LinkedI : InsuranceP : Plan

Premium for ULIP

Investment as Unit Life Coverage

Why ULIP is so attractive?

Investment Option For Your Money

FUND TYPE

ASSET MIX POTENTIALRISK /REWARD

Maximiser

Balancer

Protector

Equity& Related securities: Max 100%Debt, Money market & Cash: Max 25%

Debt. Money market & Cash: Min 60%Equity & Related securities: Max: 40%

Debt Instruments, Money market & Cash: Max 100%

High

Moderate

Low

Associated Charges/Costs

What is NAV ?

NAV Net Asset Value is value of assets held by the insurance co after deducting various

charges and it is computed daily based on closing price of securities.

HOW IS UNIT VALUE CALCULATED? A = Market /Fair Value of the relevant Plans Investment Plus Current Assets Less Current Liabilities and Provisions. B = Number of Units outstanding under the relevant Plan NAV = A/ B

FOR EXAMPLE: • Let's assume at the close of trading yesterday that a particular mutual fund held

Rs.10,500 worth of securities, Rs.2,000 of cash, and Rs.5000 of liabilities. If the fund had 1,000 shares outstanding, then yesterday's NAV would be:

• NAV = (10,500+ 2,000 - 5000) / 1,000 = Rs.7.5

IRDA is the regulatory authority for insurance industry in India The IRDA deals with discrepancies in the insurance sector. It has been established to protect the interest of policyholders

Regulations of IRDA: Rural/Social Sector Obligations Insurance Advertisement Licensing of Insurance Agents General Insurance: Reinsurance Life Insurance: Reinsurance Investment Norms Third Party Administrators Protection of policyholders Interest Micro-insurance

Insurance Regulatory and Development Authority (IRDA)

The insurance sector has opened up for private insurance companies with the enactment of

IRDA Act, 1999. A large number of companies are competing under

both life and general Insurance. The FDI cap/equity in this sector is 26% and the

proposals have to be cleared by Insurance Regulatory and Development Authority (IRDA.)

The insurance sector has opened up for private insurance companies with the enactment of

IRDA Act, 1999. A large number of companies are competing under

both life and general Insurance. The FDI cap/equity in this sector is 26% and the

proposals have to be cleared by Insurance Regulatory and Development Authority (IRDA.)

NEW GUIDELINES FOR ULIP BY IRDA as on 31.05.201

Lock in period has been increased from 3 years to 5 years thereby making it long term financial instrument

Premium has gone up to 10 times of first year premium compared to 5 times

Expected commission and expense have been reduced by evenly distributing it through-out lock in period

ULIP pension or annuity will offer minimum guarantee return of 4.5 %

Standardization of surrender charges

Key Players in the Insurance Industry

Best Selling ULIP PLANS

Investment Ulip Plans

• ULIPs are the right insurance solutions for a strong wealth creation allied to a core insurance benefit. As is the case with mutual funds, investors in ULIPs are allotted units by the insurance company and a net asset value (NAV) is declared for the same on a daily basis.

Some of the Best Selling ULIP Investment Plans from Major Competitors are :

ICICI PRU PINNACLE SUPER

HDFC SL CREST

LIC ENDOWMENT PLUS

MAX NEW YORK FAST TRACK PLAN

Child Plans

Today there are ULIPs that offer money at key milestones of your child'seducation thus ensuring that your child’s education continues unhamperedeven if something unfortunate happens to you. While, the death of a parent isan irreparable emotional loss, child education plans safeguard the childagainst the financial ramifications of the death of a parent.

Some of the Best Selling ULIP Child Plans from Major Competitors are :

ICICI PRU SmartKid Premier

HDFC SL YOUNGSTAR SUPER II

MAX NEW YORK SHIKSHA PLUS II

Retirement ULIP PLANSPension plans from insurance companies ensure that regular, disciplined savings insuch plans can accumulate over a period of time to provide a steady income postretirement. Usually all retirement plans have two distinctive phases• The accumulation phase when you are saving and investing during your earning years

to build up a retirement corpus and• The withdrawal phase when you actually reap the benefits of your investment as your

annuity payouts beginSome of the Best Selling ULIP Investment Plans from Major Competitors

are :

ICICI Pru LifeLink Pension SP

HDFC SL PENSION MAXIMUS

LIC PENSION PLUS

Conclusion