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Unit Linked Insurance Plans (ULIP) Interview Questions & Answers - Learning Mode
COOLINTERVIEW.COM INSURANCE INTERVIEW QUESTIONS UNIT LINKED INSURANCE PLANS (ULIP) INTERVIEW QUESTIONS QUESTIONS & ANSWERS - LEARNING MODE

Unit Linked Insurance Plans (ULIP) Interview Questions & Answers - Learning Mode

ULIPs are a variant of the traditional endowment plan.They pay out the sum assured (or the investment portfolio if its higher) on death/maturity. ULIPs differ from traditional endowment plans in certain areas. As the name suggests, performance of ULIP is linked to markets. Individuals can choose the allocation for investments in stock/debt markets. The value of the investment portfolio is captured by the NAV (net asset value). To that end, there are many similarities between ULIPs and mutual funds. ULIPs differ in one area, they are a combination of investment and insurance, while mutual funds are a pure investment avenue.

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Unit Linked Insurance Plans (ULIP) Interview Questions & Answers - Learning Mode
Try Unit Linked Insurance Plans (ULIP) Interview Questions & Answers - Exam Mode
Question: Is Reliance Life smart pension plan a good plan to consider for retirement investment?

Answer: Reliance Life Smart Pension Plan is a poplar retirement plan which is essentially a Unit Linked Insurance Deferred Annuity Plan. The biggest advantage of Reliance Life Smart Pension Plan is the fact that it is one of the rare deferred annuity plans offering a lump sum premium under a single premium paying term. On maturity the Reliance Life Smart Pension Plan offers the policy holder the Annuity corpus as per the Fund Value, subject to 101% of all regular Premium Paid. In case the policy holder Source: CoolInterview.com
Question: Are ULIP child plans any different from normal ULIP plans?

Answer: Unit linked children insurance plans are just like any other ULIP plan with market dependant returns. ULIP plans have many extra charges associated with them like premium allocation charges, policy administration charges, mortality charges to name a few. Even the charges for a partial withdrawal or policy surrender are chargeable with tax obligations. The good thing about ULIP child plans however is the fact that the beneficiary for such plans is the child. In the unfortunate event of death of t Source: CoolInterview.com
Question: Why do companies charge a premium allocation charges in a ULIP scheme?

Answer: Insurance companies use some part of the Premium towards payment of various expenses like distributor fee, underwriting expenses of the policy as well as medical expenses. Depending on the insurance company, the premium allocation charges are levied as a certain percentage of the premium. Premium allocation charges are deducted upfront and the remaining money gets invested in the chosen fund. Let's assume you invest Rs 5,000 each month in a ULIP plan which has a 2% premium allocation charge. Source: CoolInterview.com
Question: Is there a time limit for partial withdrawal of money from an insurance policy?

Answer: Recent IRDA regulations now facilitate you as an insurance policy holder an added opportunity to partially withdraw funds from the invested amount. In a unit linked policy, you can partially redeem up to 20% of the fund value while in non linked policy you can get a maximum of up to 80% of the surrender value. As far as time limit is concerned partial withdrawal is allowed only after completion of 5 policy years. Each insurance company has set a minimum limit for partial withdrawals varying from Source: CoolInterview.com
Question: What are premium allocation Charges in ULIPs?

Answer: Every time you take up a ULIP insurance plan, the insurance company spends some amount of money on distributor fee, underwriting expenses of the policy as well as medical expenses. Premium allocation charges are levied as a certain percentage of the premium to offset for all such expenses. Premium allocation charges are deducted upfront and the remaining money gets invested in the chosen fund.

Some insurance companies are waiving off any premium allocation charges. Usually the waiving of Source: CoolInterview.com

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