Service tax needs to be checked. I believe it is 12% and not 10%. Also secondary education cess is further divided into 2% and 1% respectively. Get the same verified from Finance team.
Last bullet * is put…pls check
Buy the right insurance policy after knowing the charges involved.
Buy the Right
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 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
Various Charges Involved
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.
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.
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)
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.
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
mortality charges, fund management
charges and policy administration
*Gross and Net Yield refer to the
yield secured from the ULIP before
and after deducting all the charges,
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