What is ULIP Insurance:

In a layman term, ULIP insurance plans are a combination of insurance and investment. These plans are generally goal based, systematic and long term ones.

If you were to avail these plans you can get lots of benefits related to tax under the section 80c of IT Act. In most of these insurance plans you can see two distinct features: transparency and flexibility. There are great options in these plans too. For instance, you can either increase or decrease the premiums for a period of 3 years.

If you are planning to opt for any of these insurance plans you will do well to understand the cost structure involved before taking the plunge into it. If you are still wondering how the charges are levied for different ULIP insurance plans, then they are.

1. Charges for Policy Administration: - This refers to the fixed amount that depends upon the percentage of money assured or inflation rates that keep fluctuating through out the year.

2. Charges for Premium Allocation: - ULIP cost structures are generally so designed that its benefits will start reaching only after 5-6 years from the time you did the investment. A portion of payment done for premium will be diverted to these charges. This is usually calculated in terms of percentage of premium.

3. Charges for Mortality: - These insurance covers are also charged for mortality which in turn depends on factors like level of risk covered, sex and age and so on.

4. Charges for Fund Management: - These charges can vary between 0.5% and 2.0% on a yearly basis and is calculated as a percentage of fund management.

If you want to get more out of these insurance plans, you need to follow simple guidelines like Starting early with the plans, investing regularly, and so on.