I agree to the Terms of Usage and Privacy Policy. By submitting my contact details here, I override my NDNC registration and authorize ABSLI to contact me by phone/e-mail/SMS/WhatsApp. Trade Logo "Aditya Birla Capital" displayed above is owned by ADITYA BIRLA MANAGEMENT CORPORATION PRIVATE LIMITED (Trademark Owner) and used by ADITYA BIRLA SUN LIFE INSURANCE COMPANY LIMITED (ABSLI) under the license. BEWARE OF SPURIOUS / FRAUD PHONE CALLS! IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint. ABSLI Nishchit Aayush is a non-linked non-participating individual savings life insurance plan (UIN No 109N137V05)
Premium redirection, also known as premium redirection option or premium redirection facility, is a feature offered by some life insurance policies in India that allows policyholders to allocate a portion of their premium payments towards different investment options or funds within the policy. This feature gives policyholders the flexibility to customize how their premium contributions are invested, potentially maximizing their investment returns.
How Premium Redirection Works
With premium redirection, the policyholder can choose to allocate a certain percentage or amount of their premium payments to specific investment funds available within the insurance policy. The policyholder typically has the option to select from a range of funds with varying risk profiles, such as equity funds, debt funds, or balanced funds.
Once the premium redirection option is activated, the specified portion of the premium is directed towards the chosen investment funds instead of being allocated entirely towards the base life insurance coverage. The policyholder's contributions are invested according to the chosen funds' performance and investment strategies.
Benefits of Premium Redirection
Premium redirection offers several benefits to policyholders:
Customisation and Flexibility
Policyholders have the flexibility to allocate their premium payments according to their risk appetite and investment goals. They can choose different investment options based on their desired asset allocation and investment strategy.
Potential for Higher Returns
By redirecting a portion of the premium towards investment funds, policyholders have the opportunity to potentially earn higher investment returns compared to the returns generated solely by the base life insurance policy.
Diversification
Premium redirection allows policyholders to diversify their investment portfolio by allocating funds to different asset classes or investment strategies. This diversification can help reduce risk and potentially enhance overall investment performance.
Considerations for Premium Redirection
Before utilizing premium redirection, policyholders should consider the following factors:
Risk Tolerance
Policyholders should carefully assess their risk tolerance and investment objectives before redirecting premiums. Different investment funds carry varying levels of risk, and it's important to align the investment choices with individual risk preferences.
Investment Expertise
Policyholders should have a basic understanding of investment concepts and be comfortable making investment decisions. If uncertain, seeking guidance from a financial advisor can be beneficial.
Policy Provisions
Policyholders should review the terms and conditions of their insurance policy to understand any restrictions, charges, or limitations associated with premium redirection. It's essential to be aware of any potential fees or penalties for reallocating premiums.
In conclusion, premium redirection is a feature available in certain life insurance policies that allows policyholders to allocate a portion of their premium payments towards different investment options within the policy. This provides customisation, flexibility, and potential for higher investment returns. However, it requires careful consideration of risk tolerance, investment expertise, and policy provisions before implementation.
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9ABSLI Wealth Assure Plus plan for 30 years of a healthy male. Plan type: Classic. Investment option: Smart option. Risk Profile: Moderate. Payment frequency: Yearly. Basic annual premium: ₹24,000. Policy Term: 15 years. Premium paying term: 10 years. Refer to policy brochure for more details.
ABSLI Wealth Assure Plus is a non-participating unit linked life insurance plan. (UIN: 109L120V02)
ADV/9/23-24/1947