Top-up Premium

[Rishabh SuranaModerator]

A top up premium is the extra premium that the policyholder pays over and above the regular premium in ULIP. It gives the flexibility to the policy holder to increase the value of investments over a long term .The premium allocation charge generally lies between the ranges of 1-3%.In most cases, the amount should not exceed 25% of the total premium paid. Minimum top-up amount is always clearly defined in the policy document. In most cases , top-up premium does not increases the insurance component of the ULIP .

Also Read : Exercise on how we can use SUMPRODUCT in place of SUMIF & SUMIFS function .

http://forum.theactuarialclub.com/viewtopic.php?t=2730

[anishaParticipant]

RISHABH wrote:

It gives the flexibility to the policy holder to increase the value of investments over a long term .The premium allocation charge generally lies between the ranges of 1-3%.

I did not get you. Increase the value of investments? That means increasing the term of ULIP?

[Rishabh SuranaModerator]

Anisha wrote:

RISHABH wrote:

It gives the flexibility to the policy holder to increase the value of investments over a long term .The premium allocation charge generally lies between the ranges of 1-3%.

I did not get you. Increase the value of investments? That means increasing the term of ULIP?

The term of the Ulip does not change ; it remains same . If the fund is performing well & u have spare money then you can invest according to the limits specified by the insurance co.

Maximum amount get invested since insurance cover does not increases (so charges are less ) and also u dont have to pay any extraa money over top up premium which u have to pay when u take an another policy .

[Mayank GoyalKeymaster]

1% – 3% of premium or increase in Investments? What is the approx proportion of premium to investment on top up premium?

[darshanmParticipant]

So 1-3% of the top up premium is the allocation charge?

And if that is so how will the amount exceed 25% of the total premium paid?

Sent from my moto g(6) play using Actuarial Info mobile app

[Rishabh SuranaModerator]

darshanm wrote:

So 1-3% of the top up premium is the allocation charge?

And if that is so how will the amount exceed 25% of the total premium paid?

Sent from my moto g(6) play using Actuarial Info mobile app

For most of the Ulip products, IRDAI have defined that the total amount paid as a top up premium(i.e. additional investments) should not exceed 25% of the total prem payable & paid till date and the minimum limit is also defined in the policy docx.

If you are investing Rs10000 as a top up prem then the co. would charge only the allocation charge viz 1-3% of Rs 10000 and invest the rest money .

[Rishabh SuranaModerator]

Mayank wrote:

1% – 3% of premium or increase in Investments? What is the approx proportion of premium to investment on top up premium?

1-3 % are the allocation charges levied on top up premium.

The max limit of investment through top up prem is 25% of the prem payable or paid till date .

[darshanmParticipant]

RISHABH wrote:

darshanm wrote:

So 1-3% of the top up premium is the allocation charge?

And if that is so how will the amount exceed 25% of the total premium paid?

Sent from my moto g(6) play using Actuarial Info mobile app

For most of the Ulip products, IRDAI have defined that the total amount paid as a top up premium(i.e. additional investments) should not exceed 25% of the total prem payable & paid till date and the minimum limit is also defined in the policy docx.

If you are investing Rs10000 as a top up prem then the co. would charge only the allocation charge viz 1-3% of Rs 10000 and invest the rest money .

Ohh okay, Got it!

Thanks.

Sent from my moto g(6) play using Actuarial Info mobile app

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