Unit Linked Pension Plan: All you need to know

Unit Linked Pension Plans (ULPPs) are a combination of investment and insurance. These ULPPs allow policyholders to secure his or her post-retirement life goals with ease. ULPPs are ideal for investors looking for long-term savings. In recent years it has gained immense popularity. The minimum and maximum age limit for investing in ULPP is 35 years and 70 years, respectively. The payment terms will be the same for the policy term you choose.

Features

The ULPP policy term can vary from 5 years to 30 years. During the initial years of ULPP investment, the premium allocation will be low and it will gradually increase in the later years.

In ULPP schemes, fund management expense ranges between 1% to 1.35%.

In case of guaranteed returns, the insurance company charges a fee.

According to market experts, ULPP offers a guaranteed maturity benefit between 101% and 195%.

In the event of the death of the investor before the end of the investment term, the guaranteed death benefit is to be paid to the nominee.

Risk factor

Unit-linked retirement plans are market-linked products. So, there is a market risk factor. Both investors have a choice about the asset allocation of the fund they invest in. It can be 100% equity, 100% debt, or some sort of a mix of the two, depending on their risk profile. Switching is also permitted in ULPP.