Today, a lot of online platforms sell t-shirts that are customised exactly as per your preferences. The seller allows you to choose the type of t-shirt, the colour, and so on. You can also add graphics, quotes, designs, clip arts, etc. of your choice on the t-shirt.
Similar to this, you can also customise a Unit Linked Insurance Plan so that it perfectly fits your requirements. Wondering how?
Let's find out!
Customisation Options Available Under ULIPs
Limited Pay Options
Normally, when you buy a ULIP, you're required to pay the premiums until the end of the policy duration. For instance, say Rishi purchases a ULIP for a duration of 25 years. In this case, Rishi will have to continue paying the premiums for the next 25 years. Now, what if Rishi wants to finish paying off the premiums early, say, in the next 5 or 10 years?
He can do this with the help of the Limited Pay option. Limited Pay is a feature that allows you to complete all your premium payments in bigger and faster instalments. And, you can enjoy the policy cover until the end of the policy duration.
There are several Limited Pay options available under ULIPs, like 5-pay, 10-pay, 15-pay, and so on. A 5-pay limited pay option comes with a premium payment term of 5 years. A 10-pay limited pay option comes with a premium payment term of 10 years. And so on.
Now, let's take Rishi’s example again. Say he chooses the 10-pay limited pay option at the time of buying the ULIP. In this case, he can finish paying his premiums in the next 10 years and get the premium payment liability off his chest quickly.
Premium Payment Frequency
Next, you can also customise how frequently you want to pay the policy premiums. Normally, insurance companies provide 4 premium payment options under Unit Linked Insurance Policies -
- Annual payment option
- Semi-annual payment option
- Quarterly payment option
- Monthly payment option
You can choose between these 4 premium payment options based on your convenience. If you think you won’t be able to afford large amounts every year, you can choose the semi-annual, quarterly, or monthly payment options. In case you can pay a large sum each year, you can choose the annual premium payment option.
Important:
Whatever payment frequency you choose, make sure you have auto-debit or standing instructions set up on your bank account. This will ensure that your premiums are paid on time.
Riders
Riders are add-ons you can buy with your base Unit Linked Insurance Plan. They are ready-made extensions that help enhance the total scope of your policy cover.
Riders kick in and will pay an additional sum of money to your nominee under specific circumstances. For instance, an accidental death benefit rider is one of the riders you can buy with a ULIP. This rider will pay an additional sum of money to your nominee if you pass away due to an accident.
Riders can be purchased by paying a certain additional cost. And, they don't require any additional documents or medical tests - beyond the ones you undergo for the base policy. Hence, they are considered to be one of the most convenient customisations.
Generally, there are 3 types of riders available with a Unit Linked Insurance Policy -
- Accidental Death Benefit Rider
- Waiver of Premium due to Critical Illness Rider
- Waiver of Premium due to Accidental Disability Rider
Summing up!
There are several customisation options available with a Unit Linked Insurance Policy. If you want to finish paying off your premiums early, you can choose the Limited Pay option. You can also choose how frequently you want to pay your premiums. You have the option of paying your premiums annually, semi-annually, quarterly, or monthly. Lastly, you can also opt for riders with your base policy. Riders are add-ons that offer additional benefits under specific situations. Read the next article to learn more about the riders available with ULIPs.
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4 min read
20 Apr 2023
Key takeaways from this chapter
