PDA

View Full Version : What are Type I and Type II ULIPs?



Mayur09
05-03-2011, 02:23 AM
What all types of ULIPs are available? I was reading in an article about Type I and Type II ULIPs. What are Type I and Type II ULIPs? Do we need to take care of these terms while buying ULIP?

tigershark
05-03-2011, 02:21 PM
Type I ULIP
Gives the higher of the sum assured or fund value as death benefit. For example ‘A' holds a type I ULIP that gives her a sum assured of Rs 5 lakh for an annual premium of Rs 50,000.
In case of death in the initial years of the policy, when the fund value is less than the sum assured, the insurer will pay the agreed sum (which here is Rs 5 lakh) to A's nominee. However, from the time the fund's value goes higher than the sum assured, the death benefit will be the accumulated amount in the fund. This essentially means that post the initial years of the policy, you cover the risk with the money you yourself have saved over the years.
Premium amount is lower for Type 1 ULIP compared to other ULIP types.
Type II ULIP
This plan pays the policy holder both benefits i.e. sum assured and fund value. For example , if ‘A‘ holds a type II ULIP, the insurer would have given A's nominees both the sum assured of Rs 5 lakh and the amount accumulated in the fund as on the date of death. For the added risk the insurance company assumes under the type II policy, it charges the policy holder an extra cost.

>take
05-03-2011, 06:26 PM
What all types of ULIPs are available? I was reading in an article about Type I and Type II ULIPs. What are Type I and Type II ULIPs? Do we need to take care of these terms while buying ULIP?
Type 1 ULIP
Tyoe 1 ULIP the policy holder will receive either insurance and investment benefit not both. At the end of term (maturity period) policy holder will get benefits from either investment or the insurance section of the ULIP, which ever is higher.
Type 2 ULIP
This is same as Type 1 ULIP except, in this plan the policy holder get both benefits i.e benefits from insurance section and investment section of ULIP. But you need to pay higher premium for this plan.

shivkumar
06-03-2011, 05:59 PM
Pension ULIPs and Child ULIPs are Type I or Type II?

tigershark
09-03-2011, 12:07 AM
Pension ULIPs and Child ULIPs are Type I or Type II?
Pension ULIP
In Pension ULIP, the benefits are not paid as a lump sum the end of ULIP term. But the plan pay small amounts post set retirement age.
Children’s ULIP
This ULIP is intended for child future need e.g. education, marriage and other finance requirements.

tigershark
09-03-2011, 12:08 AM
Missed this part of the query -
Pension or Children’s ULIPs can be type I or Type II, depending on the type of policy you have bought.

>take
09-03-2011, 03:11 AM
One more ULIP - Health Insurance ULIP
This ULIP provides Health insurance coverage with the death claim. Various critical illness and disabilities are covered and treatment options are available with this ULIP.