In life, many times, things might not go as planned. Sometimes you make a plan, execute it to perfection but it ends up being completely unsuccessful. This applies to finances as well. You put money into something so that things are better for you financially, but it ends up being a disappointment. A great example can be your ULIP plan. Sometimes you buy a ULIP plan thinking you will enjoy a wide range of benefits. While the plan is often profitable, what if doesn’t work well for you? You might wonder what you can do about it.
Well, you might have shopped for clothes, electronics, etc. online. With every purchase, you have the option of getting a refund if the product does not suit your liking. While, it is not exactly the same with ULIP plans, there is a provision for refunding a ULIP plan. There are also other options available for a policyholder. Here is everything you need to know about it:
- Refunding ULIPs
Firstly, you can get a refund on a ULIP plan if you are dissatisfied with it. However, the offer does not stand for all time. When you buy the policy, you have a certain amount of time as a free look period. This period is designed for you to essentially read the fine print of the policy. This gives you time to check if the policy is completely as good as you want it to be. If it is not to your liking, you can use this time period to return the policy and get a refund.
This refund includes the premium you paid for the policy along with other expenses as well. For example, ULIP plans are essentially life insurance plans with investment options. All kinds of life insurance plans take your health, lifestyle, and life expectancy into account before offering coverage. To have the right information on your health, insurance providers will require you to go through medical tests. The expenses of these tests are counted as an insurance cost. Hence, when you refund your plan, you get the refund for the cost of medical tests as well. Other expenses that are refunded include stamp duty, proportionate risk premium, etc.
- Switching funds
ULIP plans work through units. When you pay your premium, you purchase a fixed set of units. Each of these units has a monetary value. The total worth of the units in each category decides how much coverage you have and how much money you’ve invested. Depending on your financial goals, either you can divert more units towards various market linked funds as an investment, or store these units as insurance coverage. Regardless, there is always a chance that the funds do not work out for you.
In such a situation, you can simply switch between your ULIP funds. There are different funds that your money is invested in. because these funds are linked to the market, market conditions affect their performance as well. Different funds are affected differently in a certain market situation. Hence, there is way to avoid adverse market conditions by switching to a different fund. If you were heavily into equity funds, you can go for a fund switching into debt funds. This not only helps you protect your investment, but it also makes sure that the entire ULIP plan does not fail as a whole. This means that it avoids any adverse effects on the insurance coverage you have.
Now that you are aware of what to do in case you aren’t satisfied with your ULIP, make sure to take the right decision! Use a ULIP calculator to know how much you need to invest in today to secure your financial life goals tomorrow.