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How Does A Unit Linked Pension Plan Work?

 
 
Life Insurance Retirement plan

If you are looking for a single smart retirement planning idea that gives you the best of investment and protection, you can consider a ULIP. ULIP (Unit Linked Insurance Plan) is a type of insurance wherein some portion of your premium is invested in the market and the rest in life insurance. Based on your financial risk appetite, several fund options such as equity, money market, debt and hybrid are available.

A Unit Linked Pension Plan is a type of ULIP that allows you to choose from an aggressive to a conservative approach for investing your money. The invested amount grows over the years and is made available to you at the time of retirement.

A Unit Linked Pension Plan is a type of ULIP that allows you to choose from an aggressive to a conservative approach for investing your money. The invested amount grows over the years and is made available to you at the time of retirement.

How does this plan work?

A unit-linked pension plan (or a market-linked pension plan) works in two phases. The first one is the Accumulation Phase (from start of investment till retirement), and the second is the Reaping Phase (where one-third of the corpus is paid to the policyholder while the remaining is invested in an annuity scheme). At the end of the second phase, the investments along with the benefits from the scheme are paid to the investor at a regular interval.

The investment phase of the plan works as illustrated below:

how does unit linked pension plan work

The insurance provider deducts certain charges such as administration charges, fund management charges, mortality charges, etc. in the form of units.

Options Available in Unit Linked Pension Plan

Pension schemes generally offer additional features that allow the investor to avail benefits based on their specific needs and choices. Max Life offers the Max Life Forever Young Pension Plan, with investment options such as:

1. Pension Maximiser Option: Amount equal to higher of fund value or 101% of the cumulative premiums is paid at maturity.
2. Pension Preserver Option: Amount equal to higher of fund value or 110% of the cumulative premiums is paid at maturity.

Premium Flexibility

The policyholders can pay single premium in lump sum at the beginning of policy term or pay regular premiums. Regular premiums are pre-determined amounts that the policyholder has to pay annually, semi-annually, quarterly or monthly.

Vesting Age

The policyholder can choose the vesting age from 50 to 75 years as desired. Max Life offers various options to customize your pension scheme. Click here for more details.

Riders

The Max Life Forever Young Pension Plan offers Max Life Partner Care Rider for the spouse of the policyholder.

ULIP not only offers flexibility to switch from equity to debt but also guarantees pay out of fund value after policyholder’s death.

Unit Linked Insurance Products (ULIPs) are different from the traditional insurance products and are subject to the risk factors. The premium paid in the Unit Linked Life Insurance Policies is subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Max Life Insurance is only the name of the insurance company and Forever Young Pension Plan(UIN: 104L075V02)is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects or returns.For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. Past performance of the funds does not indicate the future performance of the funds. You may be entitled to certain applicable tax benefits on your premiums and policy benefits. Please note all the tax benefits are subject to tax laws prevailing at the time of payment of premium or receipt of benefits by you. Tax benefits are subject to changes in tax laws.

 
 
 

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