All You Need to Know About Non-Linked Insurance Plan

What is Non-Linked Insurance Plan?

Features of Non-Linked Insurance Plan

How Do Non-Linked Insurance Plans Differ From Linked-Plans?

While purchasing a life insurance policy, you will find both linked and non-linked plans. To ensure that the policy you purchase will meet your requirements, you need to understand each of these plans in detail.

Here are some of the notable differences between linked and non-linked insurance plans:

Factors Linked Insurance Plan Non-Linked Insurance Plan
Fund choice In this type of life insurance plan, you have the option to choose the type of fund in which a portion of your premium will stay invested. You cannot choose the fund type where your insurance company will invest your premium.
Market dependence Since your money is put into open investment instruments like company shares and bonds, you need to depend on market performance. Your insurance company invests your premium at their discretion and bears all the risks and opportunities. Even if they make a loss or profit, you will get the predetermined policy benefits.
Transparency The utilisation of the premium amount is transparent in a linked-insurance plan. You can see and track your investment portfolio. Further, you can change your fund type as per the current market situation if you stay alert. In a non-linked insurance plan, you do not know where and how your insurer leverages the premium. You do not get a fund portfolio which you will need to track.
Withdrawal This plan comes with the facility of withdrawing a certain percentage of accumulated funds after a predetermined lock-in period. This way, you can leverage your fund to cope with emergencies. A non-linked insurance plan does not have a partial withdrawal facility. If you are in dire financial need, you can surrender your policy. Alternatively, you can take loans against this policy.

If you are looking for a policy with guaranteed sum assured and maturity benefits, you can purchase a non-linked insurance plan. With this kind of policy, you do not have to cope with any market fluctuation. Thus, it reduces much of your time and concern about switching funds. Furthermore, with the affordable premium amount, you can easily continue your policy and get life cover for your family.

Which One to Choose - Linked or Non-Linked Insurance Plan?

FAQs about Non-linked Insurance Plans

How can a non-linked insurance plan help you protect the financial interest of your family? up-arrow

In a non-linked insurance plan, you get to ensure a fixed maturity amount. Since you know how much you will get after the terms, you will be able to plan your bigger expenses accordingly. For example, the amount can help you bear the expenses incurred in the wedding of your son and daughter.

What is a Unit-Linked Insurance Plan? up-arrow

Unit-linked Insurance Plan or ULIP is a policy in which the insurance company shares your premium between life cover and a market fund. This fund can be equity-based or debt-based. You get the right to choose the type of fund in which you would like to invest in. Therefore, besides getting the life cover, the insurer also lets you obtain the aggregate value of your fund.

Which documents do I need to submit to buy a non-linked insurance plan? up-arrow

You may need to give the following documents to your insurance company while purchasing a linked insurance policy:

  • Age proof
  • Residential proof
  • Medical diagnostics reports
  • Photo identity proof
  • PAN card 
  • Income proof