The Hindu Business Line : UTI doubles target amount under ULIP

UTI Mutual Fund has more than doubled the target amount under Unit Linked Insurance Plan (ULIP) even as it has given special treatment to adult female investors who do not have an independent income of their own.

Both male and female investors as well as children aged 12 years and above will see the existing cover increase from Rs 2 lakh to Rs 5 lakh, provided they have independent income. Adult females who are not so fortunate will see their existing cover increase from Rs 1 lakh to Rs 2 lakh.

The change will allow unit holders to secure the maximum target amount through one or more allocations for 10 or even 15 years. While the minimum target amount is Rs 15,000, the amount can be styled in multiples of Rs 1,000 for the 10-year plan and Rs 1,500 for the 15-year plan.

The change, said Mr Rajesh Bhojani, President-Sales at UTI MF, has come into effect since earlier this month. The move is expected to help investors zero in on ULIP in a more active manner, he added.

The MF, as an example, has cited the case of an investor who selects the 15-year plan and wants to have Rs 5 lakh as his target. Such a person can go for a maximum target of Rs 4,99,500.

Distributors, it is pointed out, are being urged to offer ULIP to investors on the basis of three factors: Performance, benefits and ease of operations, liquidity included.

ULIP, Mr Bhojani maintained, is the oldest scheme of its kind in India, dating back to the early 1970s, and combining income tax and insurance benefits. UTI MF hopes to push it in the coming days in the face of competition from other unit-linked insurance plans, especially the ones promoted by private-sector life insurance companies.

ULIPs of all kinds are currently being marketed aggressively, their relatively high expenses notwithstanding. Investors will need to compare the expenses charged by UTI and those charged by the insurers before they take decisions, Mr Bhojani said.

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