Buy the Right Insurance Plan

After knowing the charges involved

When you purchase an insurance policy, are you aware of the

various charges? If not, then read on to ensure you buy the right

plan with your eyes wide open

Irrespective of the type of insurance that you purchase, although the

premium that you pay appears to be a single amount, it is a

combination of different charges

While some are levied across all policy types, some are applicable

to market linked policies, where fund management is involved. Still

other charges are levied when you opt for additional services within

a given basic policy

Various Charges Involved

Various Charges Involved

Mortality ChargeThe insurance company uses part of the premium that you pay to provide for the sum assured.

This could be in the form of death or maturity benefit, as the case may be. Factors that

have any impact on this charge include your age, desired sum assured, health,

occupation, lifestyle, etc.

Fund Management ChargeThis charge is applicable when a part of the premium amount is invested in different types of

capital market funds, as is the case with unit linked insurance plans.

Policy Administration ChargeAn insurance company’s administrative expenses - such as documentation, etc. - are met

through this charge. This charge may either be a fixed amount or a certain percentage of

the premium amount or sum assured. However, it is over and above the basic policy

premium. In case of ULIPs, it is collected by cancelling certain allocated units per month.

Various Charges Involved

Rider Premium ChargeRiders are optional benefits that you can add to your existing policy to enjoy a higher

coverage. For these additional benefits, you are charged an amount over and above

the basic policy premium

Partial Withdrawal ChargeYou may need some money to meet a financial emergency. In such cases, when you

undertake a withdrawal from the accumulated policy fund, this charge is levied.

Service TaxThe various charges levied by an insurance company (e.g. fund management, mortality

charge, etc.) attract service tax. Presently, the tax rate is 10 percent + 3 percent

education cess. (Note: 10 per cent is the service tax and on the tax so computed,

education cess is levied at the rate of 3 percent)

Various Charges Involved

Besides the above, charges are applicable when you activate options such as switching

from one investment fund to another, redirection of future premium, surrender, partial

withdrawal, revival of a lapsed policy, etc.

Switch: In a ULIP, you are permitted a certain number of free switches (i.e.

changing your choice of investment funds) a year. However, additional switches

may attract a charge which is usually a fixed sum per switch.

Premium redirection: Premium redirection permits channelling of future premiums

to a different fund or set of funds. Like a switch, the insurance company allows

certain number of free re-directions a year and levies charges for additional ones.

Surrender charge: This charge is levied when you want to discontinue the policy

before its maturity and opt for the accumulated policy amount. This charge is

computed either as a certain percentage of the fund or the annual premium.

Other Charges

According to new IRDA(Insurance Regulatory and Development Authority) rules (which are applicable from 1/09/2010),

for ULIPs with less than or equal to 10 years duration, the difference between the gross and net yield* should not be

more than 3 percent, of which the overall management charges put together should not be more than 1.5 percent

For ULIPs with a maturity period greater than 10 years, the difference between the gross and net yield should not be

more than 2.25 percent, of which the overall management charges put together should not be more than 1.25 percent

Important

Management charges include

mortality charges, fund management

charges and policy administration

charges

*Gross and Net Yield refer to the

yield secured from the ULIP before

and after deducting all the charges,

respectively

Disclaimer

Insurance is the subject matter of the

solicitation. Read the product brochure

carefully before buying the plan.

Registered and Corporate Office Address:

IndiaFirst Life Insurance Company Ltd.,

301, ‘B’ Wing, The Qube, Infinity Park,

Dindoshi-Film City Road, Malad (E),

Mumbai - 400097. Website: www.

indiafirstlife.com. Registration No: 143.

Toll Free No. 1800 209 8700. SMS

<FIRST> to 5667735, SMS charges

apply.

Thank You