What is Sum Assured in ULIP: How to Choose and Benefits

What Is Meant by the Sum Assured in ULIP?

How to Choose a Sum Assured in ULIP?

What Is the Benefit of Increased Sum Assured in ULIP?

What Are the Different Pay-Out Cases Available in ULIP?

FAQs About Sum Assured in ULIP

Does a nominee have to pay tax on the sum assured of ULIP? up-arrow

Section 10(10D) of the Income Tax Act of India exempts the sum assured of ULIP from tax liabilities. However, this amount must meet some conditions to qualify for tax exemption. If this policy term starts before 31 March 2012, its total paid premium amount must be lower than 20% of the assured sum. Its limit is 10% of the sum assured if purchased later on.

What documents do I need to provide while claiming the sum assured in ULIP? up-arrow

Following are some documents that you will have to submit while claiming the sum assured amount:

  • Duly filled-in claim form
  • Photo ID proof of nominee (Voter id card, Adhaar card, passport etc.)
  • Original policy documents
  • Bank account details of a nominee
  • Death certificate
  • Medical records
  • Attending doctor's statement

What is the difference between sum assured and fund value in ULIP? up-arrow

The sum assured amount is the total amount of money that nominees can get after the demise of policyholders. This amount is fixed while purchasing the insurance plan. However, the fund value refers to the total aggregated amount of your investment made through ULIP. It can fluctuate according to the current market performance of your fund.

What is the difference between the sum assured and the maturity amount of a ULIP? up-arrow

The sum assured amount is the maximum amount individuals can secure as a life cover. In case of their death, their nominees can get at least this amount. On the other hand, the maturity amount refers to the total value of all units in a ULIP fund held by policyholders.