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

How to Use the Top Up Facility in ULIPs

down-arrow
How to Use the Top Up Facilities in ULIPs
November 04, 2023

In an age where the number of insurance companies has soared inconceivably high, your insurance agent is capable of providing you with a host of policies to choose from. However, the final decision to select the right insurance plan rests entirely with you.

When the time comes to go in for a long-term, investment-driven plan such as a ULIP (Unit Linked Insurance Plan), it is important to understand how they work.

Considered to be a modern-day scheme, a ULIP provides its policyholder with a top-up facility to help individuals manage their financial plans more efficiently. In comparison, most traditional policies fail to do so.

To help you better understand ULIP’s top-up concept, let’s take the simple example of a prepaid mobile number. When you recharge your prepaid number, it increases the talk time but not necessarily its time validity. The ULIP top-up facility works similarly. It allows the policyholder to invest an amount on top of his prevailing premium. However, this only raises the fund value and not the sum assured. It is important to remember that there is a limit on the amount you can pay as a top-up premium.

The top-up option can only be availed if the regular premiums have always been paid on time through the course of the policy term. And, as long as the top-up premium doesn’t exceed 25% of the regular premiums paid until that time, you will not have to purchase an insurance cover with the top-up premium. Also, the charges levied on top-premiums are very nominal and range between 1-3%.

If you're wondering about how these top-up premiums are beneficial to you, here are a few ways in which you can use the premiums to your advantage:

  • While investing in a policy, make sure that you go for a policy which demands minimum premium. By doing so, once your ULIP renders you with good returns, you may utilise the top-up facility to direct further investment.
  • Since there are no inflated charges levied on the top-up premium, you only need to pay minimal charges.
  • You can also invest the top-up premium in the debt bracket if your existing premiums are in the equity bracket.
  • Top-ups are possibly a ULIP’s most simple and convenient tool, attempted at making your investments worthwhile. While choosing a ULIP, remember to choose a policy that furthers your investment plan. Lastly, don't forget to make the most of the ULIP’s top-up facility.

Related Articles

Calculate Insurance Premium

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?
Smart Things to Do with Your Year-End Bonus Previous
How to optimize your ULIP performance? 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