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http://licjsfs.wordpress.com/2012/03/25/are-maturity-benefits-of-all-life-...
10-Dec-13 8:59 AM
http://licjsfs.wordpress.com/2012/03/25/are-maturity-benefits-of-all-life-...
Minimum Sum Assured is 7 times the Annualized Premium or (0.25 x T x Annualized Premium), whichever is higher. Thus it is denitely more than 5 times. The calculation stands favourable in case of Single Premium policies too. Minimum Sum Assured in Single premium policies is equal to 1.25 times the Single Premium Paid for person less than 45 years of age but for person more than 45 years of age, it is 1.1 times the Single Premium Paid. The maximum amount of Sum Insured that can be opted for is 5 times the premium. Thus in single premium ULIPs, maturity benets may not be taxable if the sum assured is not chosen as at least 5 times of the premium amount. And if it is not then the maturity benets become taxable in the hands of the investor. Moreover, according to the new guidelines of ULIP, the policy cannot be completely withdrawn or surrendered before completion of 5 years. Hence the clause # 1 gets automatically fullled. Previously the norms were dierent and lots of policies would not have tax-free maturity benets. But one can relax now and purchase his choice of plan without worrying too much about tax-free maturity amount.
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10-Dec-13 8:59 AM