Do you understand ULIPs?

As the year end is approaching all insurance and mutual fund houses have come up with plans which seems that they would be doubling our hard-earned money in a short period of time by showing past performances graph, luxurious vehicles and villas.

When common man starts looking into those graphs and flashy advertisements it becomes easy for the insurance agent to convince him by not disclosing the complete details of the instruments. One such instrument is ULIP which sells like hot cake and later we face problems with ULIPS most of the times.

Keeping such kind of instances in mind today IRDA has published an advertisement as a part of their public awareness initiative some facts about ULIP. So below are the points which they have covered.

Q. Do you understand ULIPs?

A. Unit Linked Insurance Policy (U LIP) is a long term instrument for Risk Protection with a lock-in period of 5 years.

  • Do you know that every ULIP other than Pension or Annuity has a Mortality or Health Insurance cover? Find out what is the Minimum Benefit you will get on Death or Hospitalization.
  • Are you aware that Pension and Annuity ULIPs have a Minimum Guaranteed Return on the maturity date? Find out what is the rate of guarantee offered on the date you propose to purchase your ULIP.
  • Do you know that every policy shall have a Benefit Illustration giving two yield scenarios @ 6% and 10% and shall also give information regarding the various charges you have to bear? Find out what are the total charges involved. Remember that these charges will be deducted from the amount that is being invested on your behalf.
  • Have you found out how much premium you have to pay. how often and for how long? The minimum premium paying term is 5 years. Remember, for your policy to run full term you must pay your premiums on time.

Fill up the proposal form yourself after understanding the features of the policy completely. Do not sign on a blank proposal form.

You may contact IRDA call centre at 155255 if your grievance has not been attended to by the insurance company or may approach insurance ombudsman, if applicable. For further more information visit or