1. Sum Assured
Sum assured is the guaranteed amount, net of permissible partial withdrawals, that is payable on death of the life assured.
2. Fund Value
Fund value at any point of time represents the value of units at that point of time i.e. number of units multiplied by the price of the units.
3. Partial Withdrawal
Any part of fund that is withdrawn by the policyholder during the period of contract is referred to as partial withdrawal.
4. Surrender
Surrender means terminating the contract once for all. On surrender a surrender value is payable which is usually expressed as fund value less the surrender charge (the surrender charge could be zero at the later part of the contract).
5. Surrender Charge
This is a charge levied on the unit fund at the time of surrender of the contract. This charge is usually expressed as a percentage of the fund value
6. Death Benefit
The amount of benefit which is payable on death as specified in the policy document.
7. Maturity benefit
The amount of benefit which is payable on maturity i.e. at the end of the term, as specified in the policy document.
8. Premium Allocation Charge
This is a percentage of the premium appropriated towards charges from the premium received. The balance of premium which is utilized to purchase (investment) units for the policy. The percentage shall be explicitly stated and could vary interalia by the policy year in which the premium is paid, the premium size, premium payment frequency and the premium type (regular, single or top-up premium).
9. Fund Management Charge
This is a charge levied as a percentage of the value of assets and shall be appropriated by adjusting the Net Asset Value. This is a charge levied at the time of computation of NAV, which is usually done on daily basis.
10. Policy Administration Charge
This charge shall represent the expenses other than those covered by premium allocation charges and the fund management expenses. This is a charge which may be expressed as a fixed amount or a percentage of the premium or a percentage of sum assured. This is a charge levied at the beginning of each policy month from the policy fund by canceling units for equivalent amount.
11. Top-up premium
A top up premium is an amount(s) paid at irregular intervals during the period of contract. This is an additional amount of premium over and above the contractual basic premiums charged at the commencement of the contract. Top up premium does not provide additional cover to life assured.
12. Fund value
13. Partial Withdrawal
Any part of policy fund that is withdrawn / Policy fund units withdrawn by the policyholder during the period of contract is referred to as partial withdrawal.
14. Switches
This is the facility allowing the policyholder to change the investment pattern by moving from one fund (current investment in available funds in the policy) to other fund(s) amongst the funds offered under the underlying product of the insurer.
15. Premium Redirection
This is the facility allowing the policyholder to modify the allocation of amount of subsequent premium into a different investment pattern from the option (investment pattern) exercised at the inception of the contract and at later stages of the contract
16. Regular Premium contracts
ULIPs where the premium payment is level and paid in regular intervals like yearly, half-yearly etc till the end of the policy term
17. Single Premium contracts
ULIPs where the premium payment is made by a single contribution (a one time payment) at the inception
18. Limited premium payment contracts
ULIPs where the premium payment period is limited compared to the policy term. The premium is payable at regular intervals like yearly, half-yearly etc. premium contracts.
19. Whole Life Contracts
ULIPs, which do not have a definite policy term and the contract, terminate on death of the life assured or typically when the life insured attains a particular age (e.g.99) whichever is earlier. This can be issued with item 7 or 8 or 9 stated above.