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Buy the Right
Insurance Plan
After knowing the charges involved


When you purchase an insurance policy, are
you aware of the various charges? If not,
then read on to ensure you buy the...
Various Charges Involved
Various Charges Involved
Various Charges Involved


Mortality Charge

The insurance company uses part of the premium that you pay to provide for t...
Various Charges Involved


Rider Premium Charge

Riders are optional benefits that you can add to your existing policy to...
Other Charges


Besides the above, charges are applicable when you activate options such as
switching from one investment...
Important


According to new IRDA(Insurance Regulatory and Development Authority) rules (which
are applicable from 1/09/2...
Disclaimer
Insurance is the subject matter of the
solicitation. Read the product brochure
carefully before buying the plan...
Thank You
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Buy the right insurance policy after knowing the charges involved.

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Various charges invovled while purchasing an insurance plan.

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Buy the right insurance policy after knowing the charges involved.

  1. 1. Buy the Right Insurance Plan After knowing the charges involved
  2. 2.  When you purchase an insurance policy, are you aware of the various charges? If not, then read on to ensure you buy the right plan with your eyes wide open  Irrespective of the type of insurance that you purchase, although the premium that you pay appears to be a single amount, it is a combination of different charges  While some are levied across all policy types, some are applicable to market linked policies, where fund management is involved. Still other charges are levied when you opt for additional services within a given basic policy
  3. 3. Various Charges Involved
  4. 4. Various Charges Involved
  5. 5. Various Charges Involved  Mortality Charge The insurance company uses part of the premium that you pay to provide for the sum assured. This could be in the form of death or maturity benefit, as the case may be. Factors that have any impact on this charge include your age, desired sum assured, health, occupation, lifestyle, etc.  Fund Management Charge This charge is applicable when a part of the premium amount is invested in different types of capital market funds, as is the case with unit linked insurance plans.  Policy Administration Charge An insurance company’s administrative expenses - such as documentation, etc. - are met through this charge. This charge may either be a fixed amount or a certain percentage of the premium amount or sum assured. However, it is over and above the basic policy premium. In case of ULIPs, it is collected by cancelling certain allocated units per month.
  6. 6. Various Charges Involved  Rider Premium Charge Riders are optional benefits that you can add to your existing policy to enjoy a higher coverage. For these additional benefits, you are charged an amount over and above the basic policy premium  Partial Withdrawal Charge You may need some money to meet a financial emergency. In such cases, when you undertake a withdrawal from the accumulated policy fund, this charge is levied.  Service Tax The various charges levied by an insurance company (e.g. fund management, mortality charge, etc.) attract service tax. Presently, the tax rate is 10 percent + 3 percent education cess. (Note: 10 per cent is the service tax and on the tax so computed, education cess is levied at the rate of 3 percent)
  7. 7. Other Charges  Besides the above, charges are applicable when you activate options such as switching from one investment fund to another, redirection of future premium, surrender, partial withdrawal, revival of a lapsed policy, etc.  Switch: In a ULIP, you are permitted a certain number of free switches (i.e. changing your choice of investment funds) a year. However, additional switches may attract a charge which is usually a fixed sum per switch.  Premium redirection: Premium redirection permits channelling of future premiums to a different fund or set of funds. Like a switch, the insurance company allows certain number of free re-directions a year and levies charges for additional ones.  Surrender charge: This charge is levied when you want to discontinue the policy before its maturity and opt for the accumulated policy amount. This charge is computed either as a certain percentage of the fund or the annual premium.
  8. 8. Important  According to new IRDA(Insurance Regulatory and Development Authority) rules (which are applicable from 1/09/2010), for ULIPs with less than or equal to 10 years duration, the difference between the gross and net yield* should not be more than 3 percent, of which the overall management charges put together should not be more than 1.5 percent  For ULIPs with a maturity period greater than 10 years, the difference between the gross and net yield should not be more than 2.25 percent, of which the overall management charges put together should not be more than 1.25 percent  Management charges include mortality charges, fund management charges and policy administration charges  *Gross and Net Yield refer to the yield secured from the ULIP before and after deducting all the charges, respectively
  9. 9. Disclaimer Insurance is the subject matter of the solicitation. Read the product brochure carefully before buying the plan. Registered and Corporate Office Address: IndiaFirst Life Insurance Company Ltd., 301, ‘B’ Wing, The Qube, Infinity Park, Dindoshi-Film City Road, Malad (E), Mumbai - 400097. Website: www. indiafirstlife.com. Registration No: 143. Toll Free No. 1800 209 8700. SMS <FIRST> to 5667735, SMS charges apply.
  10. 10. Thank You

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