In ULIPs the insurance cover must be a minimum multiple of the premium
ULIPs can be surrendered after two years
Both the above statements are correct
Both the above statements are wrong
Answer is Right!
Answer is Wrong!
The correct answer is: C. Both the above statements are correct.
A ULIP (Unit-Linked Insurance Plan) is a type of life insurance policy that combines life insurance with investment features. The insurance cover in a ULIP is a minimum multiple of the premium, which means that the policy holder must pay a minimum amount of premium in order to be eligible for the minimum amount of insurance cover. The premium can be paid monthly, quarterly, half-yearly, or annually.
ULIPs can be surrendered after two years, but there may be a surrender charge if the policy is surrendered within the first few years. The surrender charge is usually a percentage of the fund value, and it decreases over time.
Here is a brief explanation of each option:
- Option A: In ULIPs the insurance cover must be a minimum multiple of the premium. This is correct. The insurance cover in a ULIP is a minimum multiple of the premium, which means that the policy holder must pay a minimum amount of premium in order to be eligible for the minimum amount of insurance cover.
- Option B: ULIPs can be surrendered after two years. This is also correct. ULIPs can be surrendered after two years, but there may be a surrender charge if the policy is surrendered within the first few years. The surrender charge is usually a percentage of the fund value, and it decreases over time.
- Option C: Both the above statements are correct. This is the correct answer. Both options A and B are correct.
- Option D: Both the above statements are wrong. This is the incorrect answer. Both options A and B are correct.