Q: We are interested in buying units-linked insurance scheme for a major investment company. It will be investing the money in equity of IT companies and also providing coverage to members. Can you explain the benefits of ULIP? A: Units-linked Insurance Schemes are normally a hybrid product of Life Insurance and Investment Scheme. Basically here you get life insurance coverage to a certain limit. The premium is charged at slightly below the normal prevailing rate. Then additional amount is built into to the product for investment purpose. This amount is invested in various debt and equity instruments. Some product plans have investments only in blue chip companies and some have investments in certain select sectors. The product also has a maturity date and on maturity date your investments are evaluated based on the market value and you will get the returns based on the income generated. Apart from insurance and investment another advantage of ULIP is that it has tax exemptions in most of the countries. Hence it is an instrument of tax saving for those whose incomes are taxable. Another added feature of it is that after certain number of years you can sell the units and encash them. Some institutions will also grant a fixed percentage of loan against your ULIP's. Q: I am working in the management team of a company and I do a lot of scuba diving. As a part of the Personal Property Insurance package I had insured my scuba diving equipment, video camera, gold chain, goggles and my watch. Recently I noticed that my watch was not working. I took it to the technician and he informed me that water has entered the watch and damaged certain parts. The watch is water proof and used whilst scuba diving . The cost of spare parts and repairing is around SR1,200. Can I claim this amount from my insurer? A: I have gone through your policy wording and the said loss is not excluded. You have a deductible of SR150. Hence your claim is admissible. However, as your watch is only a few months old and is supposed to be water proof, I would suggest you to first talk to your dealer. They can give you the correct picture of the damage and if the damage is due to defect in the product then you may ask them to replace your watch. If your watch does not have warranty and there is no product defect then it is better to lodge the claim with your insurer immediately. * Shujaath Ahmed Khan, an M.B.A., General Manager, Creative Associates is also a consultant and an expert in Insurance, Investments and Real Estate. He can be contacted at [email protected], website-www.creativeassociates.blogspot.com.Connect with friends all over the world. Get Yahoo! India Messenger. __
