An ULIP or unit-linked insurance plan that can meet both your life insurance as well as savings requirement comes with level as well as increasing cover option. In respect of the increasing cover plan, sum assured value gets increased by 0% in the sixth policy year and then after every 5 years during the policy term. For an increasing cover, the premium is also high and as the fund under the ULIP plan is invested in the markets it can impact returns of the policyholder.

The plan is a Type -I policy so as death benefit, nominee of the policy is entitled to either the sum assured value or fund value whichever is higher in case the insured meets death during the policy term.

Sum assured value: Insured can choose a maximum sum cover of Rs. 1 crore. Policyholder is allowed to choose a sum assured of an amount exceeding ten times the annual premium or an amount arrived at by multiplying half the policy term with annual premium. A provision to get the sum cover value increased to a maximum twenty times of the annual premium.

As provided by the insurance regulator, nominee of the policy is entitled to receive a minimum of 105% of total premiums paid until the death of the insured.

Fund options under the plan: A total of seven fund options are available for investors to choose from including equity funds to pure debt funds with exposure to equity ranging from 80-100% to nil. The investor or policy owner can either choose to put his investment in either a single fund option or in a mix of funds depending on his investment objectives and long-term financial goals.

Other special feature of the Power Insurance ULIP plan

Trigger fund option: Allows an investor in the plan to buy low and sell high.

Policy benefit can also be availed as survival benefit via the in-built Accelerated Total & Permanent Disability (TPD) benefit.

Partial withdrawal provisions provides the required liquidity to the policyholder.

Fund switch facility allowed two times in a year enables an individual to take advantage of the market dynamics.

Is it a good investment cum insurance product?

As on the death of the policyholder, nominee becomes entitled only to the sum assured value or the fund value whichever is higher. The sole purpose of getting returns over and above the insurance cover is defeated so Type-II ULIPs that offer sum assured value plus fund value in case the insured dies during the term is comparatively better and fetches higher return for the policyholder or the nominee. Also, the product is not available at cost-effective rates when compared with similar other plans.

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