What is top-up benefit under a unit-linked insurance plan?
Sudhir Chandel, Delhi
The top-up contribution benefit under an Ulip offers the policyholders the right to increase the amount of investment under the policy, or to increase the sum assured under the basic policy. The rules under the provision vary from policy to policy and across insurers. You could use the convenience of taking an Ulip with a lower premium to start with, on which you could later top up when surplus funds are available. Top-up premiums have the same tax benefits as regular premiums and you can pay top-up premiums anytime during the tenure of the existing Ulip policy. The top-ups are eligible for deduction under Section 80C as well as exemption under Section 10(10D) provided, at the time of claim the condition of the premium not exceeding 10 per cent of the sum assured is not violated with the top-up.
