CHARGES IN ULIP PLANS AFTER 1ST JAN 2010?



Can any one tell me how to calculate ULIP charges after Ist Jan 2010, as far as I know IRDA has put a cap on the charges i.e. 3% charges for 10 year plans and 2.25 charges for 15 year plan. How to calculate these charges? These 3% charges means Allocation Charges, Fund Management Charges, Policy Administration Charges and Miscellaneous Charges. These charges will not include Mortality charges, Service Tax and Guarantee charge (if any). Plz tell me am I right?

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One Reply to “CHARGES IN ULIP PLANS AFTER 1ST JAN 2010?”

  1. Hi Rajinder,

    Good question on your part. Now let’s see how it works. There are basically two types:

    Gross Value: It is a fund value of your investments with out any charges. If you invest Rs. 15,000 annually, what will be the value of your funds without any charges.

    Net Value: It is a value of your investments after deducting various charges from your funds.

    What IRDA has stipulated is that, the difference between gross value and net value should not be more than 3 % for policies with term less than 10 years and less than 2.25 % for term more than 10 years.

    And it covers all charges, including policy administration charges, mortality charges, premium allocation charges, service tax, guarantee charges, fund management charges etc.

    Regards,

    Pranav





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