Prajna Capital - An Investment Guide

ULIP Understanding the cost structure of Unit Linked Insurance Plan is necessary before taking the leap A person, 40-year-old investor, was disgruntled with his investments in Unit-Linked Insurance Plan ( ULIP ). While the equity markets have been rolling, he realized after some research that he was yet to recover the money he had invested three years ago. This, he realized, was not on account of poor fund performance but because of higher initial fund costs. While the people crib is about the non intimation of such expenses by his/her broker, insurance regulator IRDA has come to his rescue, making it mandatory to disclose all charges upfront to the buyers. Basic rules have to understand the cost structure of a fund before buying into ULIPs. And a basic understanding would save them from heartburn. So how are the cost structured for an ULIP? COSTS OF OWNING A ULIP: 1) Premium Allocation Charge The cost structure of ULIPs is such that it starts working to your benefit only after 5-8 ye...