What is Unit Linked Pension Plan?

The insurance companies in India, over the years, have launched different policies to cater to the various insurance and investment needs of the different people. One such insurance policy that has gained immense popularity recently is the ULPP – Unit Linked Pension Plan. If you want to invest in unit-linked policies, based on your risk profile, you have the liberty to invest 100% funds in equites or debt funds. You can also invest in a combination of debt and equity funds.

Features of ULPP


  • The minimum age limit for investing in ULPP is 35 years and the maximum limit is 70.
  • The payment term will be same for the policy term you choose. The policy term you choose must be in the multiples of 5 years; it can vary from 5 years to 30 years.
  • When you first start investing in ULPP, during the initial years, the premium allocation will be low and it will gradually increase in the later years.
  • As an investor in ULPP scheme, you will have to bear the fund management expense, which typically ranges between 1% to 1.35%
  • If you want guaranteed returns from your investment in ULPP, the insurance company charges a fee of 0.4% to 0.5% of the investment for guaranteed returns.
  • One of the most important reasons why a lot of people prefer investing in ULPP is that it offers a guaranteed maturity benefit between 101% and 195%.
  • In the event of the death of the investor before the end of the investment term, the guaranteed death benefit offered to the investor will be as per the terms and condition of the insurance company. In most cases, the death benefit paid is more than the premium paid by the investor.

Based on your financial goal and investment objective, you can invest in ULPPs for child education, health benefits, retirement and wealth creation. If you choose a policy for pension, the premium amount will be directly from the salary of the employer. You can also choose a systematic investment plan (SIP) so that you can increase or decrease the monthly premium as per your convenience.

Many investment experts suggest that it is best to start investing in the ULPP as soon as you start earning; whilst you are young, you can invest in high-risk plans so that you have the leverage and accomplish your wealth accumulation goals over a period. With the duration of a typical pension plan being 15 years or more, you can build a robust retirement corpus.

Learn more about your Pension Plans here.

DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.



Trending Articles

Article Links

EPF vs PPF

Employee Pension Scheme (EPS)

Pradhan Mantri Pension Plan

Types of Pension Plans

What is National Pension Scheme (NPS)

Latest Articles

pension-funds
pension-funds

How to Calculate PPF Returns

Read More
Posted on 08 February 2020
pension-funds
pension-funds

How to open an Employee Provident Fund account?

Read More
Posted on 05 February 2020
pension-funds
pension-funds

How is provident fund calculated – Know the Process

Read More
Posted on 11 January 2020