ULIP Insurance Product

Traditional Insurance

In Traditional Insurance we need to pay for the whole 10 or 20 years and at the end of 20 years we get the invested amount with some bonus.

The drawback here is that we are paying our lives and we say it as Life Insurance. It is very difficult to just pay to the insurance for the 20 years. Also, we get our money back only after 20 years. Why so? Its our Money and we give it to someone for 20 years by time he has enjoyed his Life and gives back to us with actually low bonus or investment(must say). For eg: Most of the old plans the money we paid gets doubled after 20 years which is a drawback.

Modern Insurance

ULIP(Unit Linked Insurance Plan) is a modern Insurance where we need not pay for our entire Life Time.

Its makes us convineint to pay only for first 3 years. So, from 4th year we can withdraw partially or fully.

The amount we need to pay each 3 years is minimum Rs.12,000 .

So, all we pay is Rs.12,000 multiplied by 3 gives Rs.36,000 with a sum assured (Rs.2 lakh in some Insurance companies to Rs.4 lakh in some Insurance companies)

Sum Assured is given if Natural or Accidental Death occurs to the person and his family get that prescribed amount.

What is the returns at the 20 year end?

The money you had given to the Insurance company is invested in Mutual Funds. Everyone would agree that Mutual Funds are safer than investing in Shares. So, even if your funds grows at 10% per annum which I assume to the as low in mutual funds you get double your money after 20 years with the full Insurance coverage.

But remember Harshad Metha period, where Indian Econony went down. Even in that period the share market had 20% growth which means that you can expect a lot more performance of your fund.