Question

Life Insurance Corporation of India (LIC) has launched its maiden unit linked insurance plan (ULIP) product recently.
Which of the following statement(s) is/are correct about ULIP?

ULIP provides four fund options to policy holders in form of — bond fund, balance fund, secured fund, and growth fund

• A. Only 1 and 2
• B. Only 2 and 3
• C. Only 1 and 3
• D. All of the above

Answer 1

The correct option is D All of the above

Specifications of ULIP:
It provides dual benefits of risk cover and investment opportunity in market to the policy holder and also provides option of partial withdrawal under this plan. ULIP provides four fund options to policy holders in form of — bond fund, balance fund, secured fund, and growth fund to which policy holder can switch over according to their conveniences. Policy holders can switch over among the fund options for four times in a given policy for free of charge. ULIP provides double death benefit .i.e. it gives assured amount equal to the higher of basic sum assured or policy holder’s fund value on death before or after the date of commencement of risk. It also provides accident death benefit to rider which provides for an additional amount equal to accident death benefit sum assured on death due to accident. The basic sum assured under ULIP is higher by 10 times the annualized premium and 105% of the total premiums paid. The minimum lock-in period for ULIP plan is for five years and if surrender before that an additional charge is levied.