Amongst the latest entrants in the sphere of low-cost Ulips, Edelweiss Tokio's Wealth Plus has done away with premium allocation as well as policy administration charges.

The core expense from a policyholder's point of view is the fund management charge (see table), in addition to mortality charges for providing the life cover. The life insurer allocates additional units at the rate of 1% in the initial five years as an incentive, which is enhanced to 3%, 5% and 7% in subsequent five-year blocks to get policyholders to stay invested for the long term. For instance, if your premium is ₹1 lakh, the insurer will contribute an additional ₹1,000 (extra allocation) annually during the first five years. This amount will go up to ₹3,000 and ₹5,000 (premium boosters) from years 6-10 and 11-15 respectively.

Without mortality charges, which are linked to age, the total expense ratio for the product comes to 1.14%, according to the company. On the flipside, remember that you cannot rely entirely on this product to meet your insurance needs . Even if you pay a premium of ₹5 lakh a year, your life cover will be limited to ₹50 lakh, which is likely to be highly inadequate. As per the thumb rule, your protection cover should be at least 10 times your annual income. Also, the onus of evaluating its suitability rests with the insurance-seeker, as this is an online-only plan sold through the company's website

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