Investment Plans 307 views October 9, 2021

The best part about Unit-linked Insurance Plans (ULIPs), which offer both life insurance and investment benefits, is the numerous fund options they come with. These include equity, debt and balanced funds from which you can choose one or more to achieve your financial goals. Equity funds are generally for the high-return seekers who could take greater investment risks too. Whereas debt funds are for someone seeking safe returns and having a low-risk appetite. And balanced funds, as the name suggests, strike a balance between return and risk profiles. But as needs and risk appetite vary with time, it’s important to have a flexible investment portfolio through ULIPs to stand the test of time. Switching facility is one feature that makes ULIP investments flexible for investors amid a volatile market.

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For the unversed, switching means the movement of investments from one fund to another. This way, you could protect your investments from market fluctuations and steer seamlessly through your financial journey.

But how to switch smartly to gain more? Also, what are the charges for the same or does it come FREE to you? So, you could sense there’s a lot to learn about switching in ULIPs. We only help you do so by putting information around switching in this post. So, keep reading!

When is the Right Time to Switch ULIP Funds?

The switching of ULIP Funds makes sense in case of the following situations –

If the Fund’s Performance Continues to be Bad

If the funds chosen for the ULIP investments continue to perform poorly, evaluate their performance against those that have done well. But evaluation would stand right only when you compare your fund’s performance with that of a competing one. So, if you’ve invested in a mid-cap fund, compare its performance with that of its mid-cap peers only. Look to switch your ULIP investments to the ones that have performed while your funds were not doing well.

Switch Based on the Market Scenario

The market conditions change based on the changes that take place economically, politically or even socially. While some investment portfolios react positively to these, others don’t. Suppose the equity market is doing remarkably well and your ULIP has maximum holdings in debt funds, you could fail to maximize by continuing in this manner. Change the status quo by switching money from debt holdings to their equity counterparts.

Similarly, if the debt market is doing exceedingly well, no harm in letting a few go out of your equity holdings in ULIPs to debt instruments. The key is to maximize through switching yet the maximum chunk should be where you are comfortable having it.

Switch ULIP Funds Based on Your Changing Risk Appetite

The ability to take risks may change over time based on positive or negative developments around you. But generally, it remains the maximum when you are young and comes down gradually with time. So if you start investing in equities from a young age and continue to do so till 50-55 years of your age, you would most likely generate the desired corpus. That’s the time when you could think of protecting your corpus against fluctuations that remain the case with equity ULIP investments. You could switch a significantly large proportion to debt funds of ULIPs to ensure a peaceful retirement journey for you.

Can You Switch ULIP Funds for FREE?

Some insurance companies allow unlimited free switching of ULIP funds to policyholders, whereas others charge after 5-10 instances. The charge, which could vary from one insurer to another, remains around INR 50-500 per transaction. Let’s check the ULIPs that come with unlimited free switches.

Here’s a List of ULIPs with Unlimited Free Switches

Check the table below to know the details of ULIPs that come with unlimited free switches.

ULIPsDeath BenefitMaturity BenefitMinimum Premium (In INR)
HDFC Life Click 2 Wealth

Highest of

Total Sum Assured Less Partial Withdrawal Amount, if any

105% of total premiums paid

Fund Value
Fund Value calculated by multiplying the units held in a portfolio by the prevailing price of a unit. At maturity, the fund value will also include the mortality charges deducted towards life cover and top up sum assured, if any1,000 per month
Max Life Online Savings Plan

Variant 1 - Highest of

Sum Assured

105% of total premiums paid till the date of death

Total fund value as on the date of death

Variant 2 - A lump sum payout on death plus regular monthly income payment and the fund value at the end of the policy term
Fund Value so obtained by multiplying the units by the unit price at that time 1,000 per month
ICICI Pru Signature Plan

The death benefit is based on the entry age of an individual.

Minimum Sum Assured - 7X the Annualized Premium

Maximum Sum Assured -

For Entry Age of 0-44 Years

Higher of

10X annualized premium and 70 - age at entry x 0.5 x annualized premium

For Entry Age of 45-58 Years

10 x Annualized Premium

For Entry Age of 59-60 Years

7 x Annualized Premium
Fund value including the top-up fund value. You can have it as a lump sum or as a structured manner using the settlement option60,000 for whole life plans

30,000 for other than whole life plans
Canara HSBC OBC Life Insurance Invest 4GLife Option

Single Pay - 1.25 or 10 times the single premium based on the entry age of an individual

Limited Pay/Regular Pay - 10 x annualized premium

Care Option

Limited Pay/Regular Pay - 10 x annualized premium

Century Option

Limited Pay/Regular Pay - 10 x annualized premium
Fund value payable at maturityLife Option - 24,000

Care Option - 48,000

Century Option - 48,000

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