Universal Life Products in India Review

What Are Universal Life Products in India? – Review

Universal Life Insurance products are back in India with new guidelines by IRDA. However, many people don’t know that what basically these products are, how they work and which are the pros and cons of these insurance products? In this article, I will explain you everything about these new kind of products.

Let’s start from basics.

Well, there are basically 3 types of life insurance products which are freely marketed and sell in India.

01) Term Insurance Plans (The best in my opinion)

02) Endowment or Money Back Insurance Plans (Moderately investable)

03) ULIPs (Stay Away from them).

As all of you now know that ULIPs are the worst financial products because they are the combination of the insurance and investments while term insurance are the best insurance plans.

Now, Universal Life products (ULPs) also known as VIP – Variable Insurance Plans are basically the combination of Endowment plans and ULIPs along with one additional feature and that is – FLEXIBILITY.

Well, Yes. Flexibility. There are basically 3 types of flexibility in these products which are not available in any insurance plans till now and these are,

01) Premium Amount Flexibility

02) Tenure Flexibility

03) Flexibility of Sum Assured

Yes. This is true. You can anytime increase or reduce your premium amount, tenure of the policy and sum assured according to your needs without paying any penalties or additional fees.

Say for Example, if with the increasing age, your dependents become less and financially independent, you can choose to reduce your premium amount and sum assured without paying any penalties.

Previously, this feature was not available in any insurance product of India such as ULIPs or Endowment Policies but now it is available with ULPs.

These policies are so much flexible that,

Even if you stop paying the premiums, the policy would not get cancelled. The policy would be kept alive and in force, although with a reduced sum assured.

And on the top of this, there is NO FUND MANAGEMENT CHARGE at all. This is because you don’t know where your fund is going to be invested.

Disadvantages of ULPs

The only disadvantages of these products are,

- No control over the Investments

- Highly Opaque (Lack of Transparency)

This means that these are the kind of opaque mutual funds means you will never know that where exactly and in which proportion your money is going to be invested and how these policies will generate returns for you weather by investing in stocks, bonds or both?

Which Insurance Companies provide Universal Life Products (ULPs) in India?

At present in India, the following 4 companies provide these plans which are,

01) Max New York Life

02) Reliance Life

03) Bharti Axa Life

04) Aviva Life

But I am sure that after IRDA guidelines, more and more companies will start selling this insurance cum investment product.

My Opinion -

Well, in my opinion, there is no need to invest in such kind of investment cum insurance products. This is because still the Term Insurance + Equity Mutual Funds is the best combination.

Don’t try much fancy things when it comes to investing and yes, never mix insurance with investments. It is better to have a term life insurance plan to cover your life and equity diversified mutual funds having a past record of good performance to build the corpus for your retirement and various other long term financial goals (Child marriage, future and education).

Do Rich People Buy Life Insurance?

Do Rich People Buy Life Insurance?

I receive such kind of queries several times. This is because most of the people think that Rich people are rich and they have lots of money in their bank accounts and that’s why they don’t need to buy any Life Insurance, Car Insurance, Medi claims or any other kind of Insurance products.

But well, This is a false belief. In fact, Rich People always buy a Life Insurance. Because in case of uneventful loss of life, their assets become protected from liquidating. Rich people are very smart and they are smart enough that they can control and protect their wealth even after their death.

The reason why Rich people buy a Life Insurance is because even if they loss their life, their offsprings become richer than them by claiming their life insurance policy. Isn’t it amazing?

This is a vision. It’s a long term vision. So if you want to become rich than think about protecting your wealth, Think about buying a Life Insurance.

Endowment Versus Whole Life Policy

Insurance Companies offer two basic types of Life Insurance Policies -

01) Whole Life Insurance Policy &

02) Endowment Policy

Both of the above types have different meaning. In Layman’s language,

Whole Life Insurance Policy = Purely Life Insurance Cover & Nothing Else &

Endowment Policy = Insurance + Investments (or Savings).

What is a Whole Life Insurance Policy -

Whole of Life Insurance is a form of long term insurance. It provides a cash lump sum on death or policy maturity, whichever occurs first. As a combined investment and insurance policy it can provide protection for your family against the costs associated with terminal illness or death such as funeral expenses.
Cover is provided until the insured person reaches age 95, or upon the earlier death of the insured person.
Annual bonuses are added to the value of the sum insured each year. On maturity of the policy or death, the sum insured and the Annual Bonuses that have been added each year to the policy are paid. AMP currently also pays a Terminal Bonus when the insured person dies or the policy matures. However, Terminal bonuses are not guaranteed.

What is Endowment Policy? -

An Endowment policy offers a combined long-term investment and insurance policy. Insurance is provided until a nominated maturity age, and bonuses add value to the sum insured.
Cover is provided until the policy matures, or upon the earlier death of the insured person.
This type of policy has the advantage of providing for regular savings with protection during the chosen period and can be used for many purposes such as:

• saving for retirement

• repayment of a debt, if death occurs before the loan is repaid (for example, mortgage protection) , or

• providing funds for travel or for any future purposes which require funds (such as children's education).

In short, both of the above policies are entirely different things. And you should Invest in them according to your needs and Financial Goals.

Life Insurance Quotes

There are literally more than 10 Life Insurance Companies in India. And choosing the Best Life Insurance Quote is itself a job, a tireding job.

You should Compare Life Insurance Quotes before you actually buy it. This Article is all about how you can get Life Insurance Quotes from various Life Insurance Companies?

How to get Free Life Insurance Quotes?

How can I find Term Life Insurance Quotes?

How Can I compare Life Insurance Quotes?

01) Bupa International -

Bupa International is the website which offers Free Life Insurance quotes. You just go to the site, fill the various details and click “Get Quote”, you will get Life Insurance Quotes that will be suitable for your needs.

02) Higher the Insurance Broker -

Another way to get a list of Life Insurance quotes is, you higher an Insurance Broker. An Insurance Broker is one who has an expertise in this subject. A Broker (Individual or a Company) can give you an unbiased opinion in buying various Life Insurance policies. A Broker can also assist you in buying a Term Life Insurance Policy.

03) ApnaInsurance.com -

You can also go to ApnaInsurance.com. The site has tied-up with various Insurance Companies. You just fill up the basic details and from which city of India you are and you will get the Free online assistance from this website.

So the above are the few ways to get Free Life Insurance Quotes. But in countries like India, where the Internet market is not matured, the best way to get & compare the Life Insurance quotes is to Higher the Insurance Broker.

An Insurance Broker will assist you in whole the process of selecting a Best Life Insurance policy for you and your family. Because the brokers have the full knowledge of Insurance products available on the market…….!!!!!!

So Higher the Insurance Broker & Get the Life Insurance Quotes……!!!!!!!

Life Insurance Companies

India is a very large developing country and there are many Life Insurance Companies in India. Here is a List of Most reputed Life Insurance Companies of India. Hope this List will be helpful to you…

List if Indian Life Insurance Companies -

01) Life Insurance Corporation of India (LIC) -

Life Insurance Corporation of India also known as LIC is India’s Government sector largest Insurance Company. It is the most reputed Insurance Company of India. It offers a wide range of Life Insurance schemes to the customers of India.

02) HDFC Standard Life Insurance -

HDFC Standard Life is the another reputed Life Insurance Company of India which offers the wide range of Insurance products & schemes.

03) SBI Life Insurance -

SBI or State Bank of India is India’s Largest Nationalized Bank which also offers a wide range of Insurance products.

04) Max New York Life Insurance -

Max New York Life Insurance is also the another reputed Life Insurance Company

05) Reliance Life Insurance -

Reliance Life Insurance is the Company of Reliance Anil Dhirubhai Ambani Group. It also offers many Life Insurance plans

06) Aviva Life Insurance -

07) ING Life Insurance -

08) TATA – AIG Insurance Company -

09) Bharti-AXA Life Insurance -

10) ICICI Prudential Life Insurance -

Life Insurance

What is Life Insurance and a Life Insurance Company? Can a Life Insurance Company Help Me?

Find out below:

Life Insurance is insurance for you and your family's peace of mind. Life insurance is a policy that people buy from a life insurance company, which can be the basis of protection and financial stability after one's death. Its function is to help beneficiaries financially after the owner of the policy dies.
It can also be a form of savings in the long run if you purchase a plan, which offers the option of contributing regularly.

Additionally, a little known function of life insurance is that it can be tied in with a person's pension plan. A person can make contributions to a pension that is funded by a life insurance company. These are considered private pension arrangements.
In addition, you should also make a list of what you feel needs to be protected in your family's way of life. With a life insurance policy in place, you can:

• provide security for your family
• protect your home mortgage
• take care of your estate planning needs
• look at other retirement savings/income vehicles

Did you know that a life insurance policy can:

Provide cash and income needs on and immediately following death such as unpaid bills and taxes and other obligations.
Prevent a family's suddenly dropping from its accustomed standard of living after the death of the breadwinner.

• Provide continuous flow of funds for the living spouse.
• Allocate income funds for the children's education.
• Provide a retirement income throughout old age.
• Provide a reliable savings plan for the future.
• Supplement income when earning power is destroyed by illness of accidents, such as covering medical expenses.
• Furnish surplus earnings for the investors should disaster strike.

The bottom line is this: While Life Insurance is not always the insurance product at the forefront of your thoughts, Life insurance is always a friend in time of need.
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