Know About The Returns On ULIP Investments

Things You Need to Know Before Buying Car,House, Health & Life Insurance online.

Insurance Buying Tips #1: Shop smart
When looking for insurance, your No. 1 priority should be to find adequate coverage. Price is important, but you’ll want to determine what kind of coverage you need first. Then you can fit that coverage into your budget and determine which carrier can provide you with the most comprehensive policy for your situation. You may be tempted to choose insurance with the lowest price tag, but if you don’t have enough coverage (or the right kind of coverage), you will see less financial benefit when it comes time to file a claim.
Insurance Buying Tips #2: Look for discounts
Once you evaluate your coverage needs, factor in your budget and find ways to save. Ask your insurance agent if there are any discounts on your coverage. Often, carriers offer discounts for things like paying your policy in full, staying auto accident-free or, if you’re in school, getting good grades. You also can save money by “bundling” multiple policies, such as purchasing a home and auto policy from the same carrier.
Insurance Buying Tips #3: Fill in the gaps
An average policy will cover the basics, but you may need to add extra coverage to meet your unique needs. For instance, you may have items like electronics or a nice piece of jewelry that would be financially difficult to replace, even with the assistance of your average renters or homeowners policy. You may want to add additional coverage for these items.

People buy insurance to get financial security for themselves and families in anticipation of any unforeseen event. But due to the rising inflation costs, improving lifestyle and growing aspiration it becomes imperative that apart from insurance there has to be some kind of income generation so as to match the pace of the rising living standards. Therefore, insurance companies have introduced unit-linked (market-linked) insurance plans with dual benefits known as “ULIPs.”

ULIPs are an investment vehicle that offers the dual benefits of a life cover and investment. The premium paid under ULIP is divided into two parts, where the first part goes toward cost of life cover, and the other is invested in the market for maximizing your savings. An investor has the option to choose from equity, debt or hybrid funds, where their premium will be directed. It is similar to an investment opportunity like MFs (Mutual Funds) where investors purchase units at their NAV (Net Asset Value) from a fund, but with the added benefit of having insurance cover. The ULIP NAV value of a product is calculated by adding the ULIP / mutual fund's holdings as on a particular day minus the liabilities like management fees, operating expenses, marketing expenses, among other permissible expenses and charges.

Insurance Buying Tips #4: Purchase life insurance—you aren’t too young
Life insurance is essential, no matter how young or old you are. And for millennials, buying now may be a smart move because it’s cheaper to buy a life insurance policy when you’re young and healthy. This kind of insurance can help your family cover unexpected costs in your absence, including student loan debt or a mortgage, in addition to end-of-life costs. And if you have kids, a life insurance policy can also support their education or childcare expenses. Additionally, every millennial should consider long-term disability coverage, which helps you stay afloat financially if an accident happens and you become disabled and unable to work.
Insurance Buying Tips #5: Talk to an independent agent
An independent insurance agent is an essential resource when purchasing insurance—especially if this is your first time. An independent agent works with multiple different carriers, which is different from captive agents who can only sell insurance from the carrier they work for. Working with an independent agent can help make sure that you are getting the best coverage, for the best price. You’ll also benefit from independent agents’ insurance knowledge; they know how to talk you through your options and actually explain what each policy includes. An independent agent will make sure all of your assets are covered, help you find discounts or other ways to save, and be a valuable resource as your life changes and your insurance needs change, too.
Insurance Buying Tips #6: Only buy insurance to maintain your existing standard of living
You don’t need insurance for events that won’t severely strain your finances. Start with your basic needs (home, auto, business), then work your way to include other needs (cyber, liability). You can always obtain coverage later for something if you change your mind. You can minimize your risk and maximize your savings by buying insurance that won’t cause you to break the bank.

ULIP NAV represents the value of the total holdings of the ULIP / mutual funds. It is usually decided by the number of units held by the investors and hence represents the net asset value per unit. Your insurance is linked to a Unit Fund. Nowadays, seeing the giant Ads promising you the highest NAV make us believe that we would get the highest possible return with zero risk. But, such is not the case, understand the concept of highest ULIP NAV. Investors perceive a higher NAV as being 'expensive' and may not opt to invest in the product. On the contrary, they would settle for an investment with a lower NAV because its 'inexpensive'.

One should know that ULIP NAV is merely the book value of the ULIP/ mutual fund's investments minus expenses. It should not be considered as inflated or misrepresented.

Previously, insurance companies launched products which had major differences from its existing product with different names that created confusion among policyholder. To end this wrong practice, IRDAI in its circular has said that before approving any proposed product it has to be certified that new product is not just a minor modification of existing product. These guidelines become very important in the light of speculations surrounding around highest ULIP NAV guarantee plans as they contribute 20% of total ULIPs sales. Such products give emphasis on debt and in the case of equity sell-off it may trigger further sell-off in equity markets.

Insurance Buying Tips #7: Ask your insurance provider what the policy doesn’t cover
Every insurance policy has perils that are not covered by your policy. These perils are referred to as “exclusions”, and every policy has them. Ask your insurance provider to explain the exclusions in your policy to avoid discovering what they are once you incur damages or a loss.
Insurance Buying Tips #8: Consider bundling several policies with one insurance carrier
here may be value in bundling several policies with one insurance carrier. If you’re looking to insure multiple vehicles or obtain multiple types of business coverage (e.g., liability, property, cyber), then you may want to consider obtaining coverages under one insurance provider who carries multiple products, and who may be able to offer you multi-policy discounts or loyalty programs.
Insurance Buying Tips #9: Review your insurance needs on a yearly basis
As your needs evolve, so will your insurance policy. Maybe you’ve acquired a new vehicle since obtaining auto insurance for your primary vehicle, or started operating your business out of your home, or experienced a cyber-attack during the year… Whatever the change(s), you’ll want to make sure you’re covered for any new risk exposures. Talk to your insurance provider to stay on top of your insurance needs.
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