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Switch Investment Mix with ULIP

Switch Investment Mix with ULIP
March 11, 2019
A ULIP is a Unit Linked Insurance Plan that offers the joint benefits of insurance and investment and has emerged as a popular plan in the recent times. A ULIP is a highly flexible investment channel and comes with a minimum lock in period of five years. The five year lock-in period of ULIPs makes them an ideal investment option for a disciplined corpus creation. ULIPs come with extensive tax benefits under Sections 80C and 10D of the Income Tax Act, 1961. One of the most popular features of a ULIP is the feature that allows the policy holder to switch between fund options, depending on the market-performance of a particular fund.

Here is a list of key pointers regarding the switch-fund option in ULIPs:

  1. Switching funds in an existing ULIP is a very beneficial feature as it gives you the desired safety against fluctuations in fund performances as per the market conditions. Once you invest in a fund, the performance and the resulting dividends from it may not remain stable and may vary as per the market. This feature therefore acts as a market-leveraging factor and helps you in making optimum gains.
  2. This feature is provided free of any cost etc. by various insurers up to a certain number. This number varies from one insurer to another. Some insurers provide a limit of about 10-12 free switches while others may provide even 20-22 free switches. This entitles the policy subscriber to switch between funds up to the stated number of times. However, once this capping is crossed, a fee (fund-switching fee) is levied.
  3. When you switch funds, the overall impact that it has on your insurance cover differs from one plan type to another. For instance, if your plan entitles you to receive separate monies against the insurance part and the investment core, then switching between funds has no actual impact on the overall insurance segment as the insurance payout is not impacted by any changes in investment options. However, this does not hold true when the entitlement is for the insurance corpus (sum assured) or the value of an investment fund.
  4. The process for switching is also easy. There is the offline option - where the subscriber just has to fill in the application for the fund transfer and then visit the insurance provider's nearest branch. The details like the value to be switched, the preference of the new fund option etc. must be mentioned. Alternately, there is the online option, where the subscriber has to register on the insurance provider's official web portal, log in and then apply for the fund  switch from the list of given options.

HDFC Life offers HDFC Life Click 2 Invest ULIP - a market linked insurance plan that comes with minimal charges and is best suited for your investment needs. For details, click on the mentioned link: https://www.hdfclife.com/savings-plans /click-2-invest-ulip-plan.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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