RESUME APPLICATION PAY PREMIUM
Fund Performance

Fund Performance

Knowledge Center

Knowledge Center

About Us

About Us

Tools and Calculators

Tools & Calculators

Quick links

Mobile (Download app)
  • Webpages
  • Documents
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment

For NRI Customers

(To Buy a Policy)

(If you're our existing customer)

For Online Policy Purchase

(New and Ongoing Applications)

Branch Locator

For Existing Customers

(Issued Policy)

Fund Performance Check

RESUME APPLICATION PAY PREMIUM

What do you want to do?

Quick links

Mobile (Download app)

Download HDFC Life App

Buy plans, track your policy, make renewal payments & monitor fund performance with HDFC Life App, Download Now!

Apple Logo Go to Google Play Store

Understand the switch funds option in ULIPS

down-arrow
Understand the switch funds option in ULIPS
August 24, 2023
These days, varied investment options have flooded the markets owing to consumer-centric policies laid out by the insurers. One of the best and beneficial investment options is investing in a ULIP. 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. It is ideally suited for short term financial gains and even long term fiscal coverage. A ULIP offers a beneficial and flexible feature of fund switching between the available options. This option of switching funds is very beneficial and is also exempt from any taxation etc.

Here is a list of key pointers regarding the switch-fund option in ULIP plans that will help us gain an insight into this feature:

  1. Switching funds in an existing ULIP is very beneficial 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. Therefore, once you can check that the projected performance of a particular fund is not satisfactory, you can switch to other available option and hence, keep your overall gains stable.
  2. 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 policy 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. In such cases, any fund switch (especially if done near the end of policy term) must be done after careful consideration of the options.
  3. Once you purchase a ULIP, there is a capping (generally up to 10) on the number of free fund switches in the initial years. 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.
  4. As mentioned, whenever the policy subscriber foresees or projects that a particular fund will not perform satisfactorily over a period of time, then the switch should be made. However, this must be done after professional and expert consultation and not randomly. 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.

Show Full Article
Hide Full Article

ARN: ED/12/19/17049

Term Plan Articles Term Plan Articles

Investment Articles Investment Articles

Savings Articles Savings Articles

Life Insurance Articles Life Insurance Articles

Tax Articles Tax Articles

Retirement Articles Retirement Articles

ULIP Articles ULIP Articles

Health Plans Articles Health Plans Articles

Child Plans Articles Child Plans Articles

Popular Calculators Popular Calculators

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.

LinkedIn profile
Author Profile Written By:
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.

LinkedIn profile
Reviewed By Reviewed By:

Here's all you should know about life insurance.

We help you to make informed insurance decisions for a lifetime.

Unlocking the Power of Compounding: This is why young entrepreneurs should invest in a ULIP

Unlocking the Power of Compounding: This is why young entrepreneurs should invest in a ULIP

Why young entrepreneurs should invest in a ULIP. Learn how ULIPs can empower young entrepreneurs to build wealth through smart investment strategies .

How ULIPs protect your financial goals

Mind Over Money: Tackling Financial Biases for Smarter Investments

Is 'Lifestyle-Based Financial Planning' the Key to a Secure Future?

The benefits of lifestyle based financial planning and how personalized strategies can secure your future beyond traditional saving methods, ensuring long-term financial stability.

Is 'Lifestyle-Based Financial Planning' the Key to a Secure Future?
How to Withdraw ULIP Policy? Previous
Wealth Creation – Unlocking Your Financial Freedom with ULIPs Next
HDFC life
HDFC life

HDFC Life

Reviewed by Life Insurance Experts

HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER

We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

Popular Search

Popular Searches