What is Top-up facility and how to make use of this facility in ULIPS?

POSTED BY Jagoinvestor ON September 14, 2009 COMMENTS (17)

I got a query from one reader on ULIP’s top-up facility. The question was

“I have a ICICI pension plan, recently, when thinking about topping it up, ‘i was told that top up attracts only 1%charge, as usual, I didn’t believe the agent n called up call-centre. they also confirmed the same, any idea? whats the catch?

Say, for example, I wanna invest 1 lakh yearly, so I incur 30%charge or 30000rs first year. now instead of that I just take the least possible amount that is,10000/year policy, and later top it up with 90000 every year, this way I end up saving as much as 90%, well, what do you say”. Top-ups are a good way of managing ULIP’s, Read further

ULIP's Top-up facility

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What are Top-ups facility in ULIPS?

A top up premium is something that a policyholder can invest in his ULIP on top of the existing premium payment. The charges on Top-up premiums are generally very low in the range of 1-3%.

At any time during the policy term, as long as the total of top-up premiums does not cross 25% of the total regular premiums paid till then, you do not need to buy an insurance cover with the top-up premium. So if your ULIP is performing very well, you can top it up with extra premium. See this article to read about ULIP misselling

How to make the best use of TTop-upFacility?

When you buy a Policy, make sure you take the policy for the minimum premium available and then once the policy shows good performance, you can then top it up with extra premiums, there will be some advantage of doing so. Go through This Article by Deepak Shenoy on Top Up facility.

  • Low Charges in initial years (note this will go away after new ULIP rules by IRDA).
  • If your ULIP is performing well, only then you put extra money
  • You pay less charges on premium which is top up

Go through This Article by Deepak Shenoy on Top Up facility.
This is another article you can look for more details on Top up.


Top ups are a tricky tool to make your investments in ULIPs better. Take advantage of ULIPs Top up facility if you are going to take any ULIP product, but make sure you first understand if ULIP is right for you or not?

17 replies on this article “What is Top-up facility and how to make use of this facility in ULIPS?”

  1. RM says:


    Insurance companies are not that dumb. I have ICICI Life time super ULIP policy.
    This is my 4th year. The insurance company did not give the option of top-up till the completion of 3rd year. Now that I have completed they are allowing me.
    Check and then act.

    1. RM

      Not allowing top ups till 3rd year is not a common practice , Not all ulips restrict it .


  2. swamy says:

    hi manish ji,
    My age is 30 yrs old. this is regarding ulip policy problem.. I paid bajaj alianz unit gain gold ulip for three premiums,(Rs 25,000 *3). shall I continue this ulip or not? I would like to decrese premium amount to Rs 10000? still , I do not have term insurence.I would like to stop this ULIP and going to take term insurence as i Inspired from u r article.
    please give me u r suggestion

    1. Swamy

      You asked the same thing asked by hundred’s already , the short and straight answer is

      – the first step is to increase your cover using term insuracne .
      – Then you should stop the ULIP if you cant handle it , by “if you cant handle it” ,I mean can you use switching facility effectively ?
      – Get financial planning done .


  3. Akhil says:

    Lol Companies damn to smart to put a cap on Top up’s… If any body still got doubt..

    Top up facility can be used but the amount in top up never should cross the 25 % of your paid up premium till date. because top up also cover under sec 10 (10D)….

    But yes you can put more then 25% just the way deepak mention in his topic… But do you know most of the companies won’t allowed you to increase or decrease sum Assured it means you can’t go beyond 25% 🙂

    1. manish says:


      But thats fine I guess .. If you are putting 50k per year .. then in 2 yrs it would be 1 lac and apart from regular premium most of the people wont put 25k (25%) anyways 🙂

      Dont you agree ?


      1. Akhil says:

        Yap Manish I am agree… but as deepak mention took a minimum premium and increase top up that not possible in normal circumstance… so what if you plan to invest 5k per month… this ain’t gonna work… 🙂

        1. manish says:

          hmm.. yep

          With 5k per month that would be same as 50k+ per year .. thats same as what I said . no ?


          1. Akhil says:

            lol no not as same sir..

            Deepak point:

            Choose the minimum amount for regular premium…. So I want to invest 5k pm means 60 k per annum… I choose plan and start with minimum premium of 10k pa and remaining 50k I utilise in top ups… which is not possible in normal circumstance.

            1. manish says:

              Ya , this case wont be covered then


  4. JAGAN says:

    I m jus looking for an insurance & investment plan. Hence i need to know about LIC’s market plus & Profit plus schemes review given by u. KIndly lemme know the place where it has been archived in the website. Also i m looking for a demat account , which one us u suggest ? i have it in ICICI but not satisfied 🙁

    thanks !!!

    1. Jagan

      We will come up with the review later . for now just educate your self with how to think when you take a policy . What are your requirements for demat account ? do you trade a lot ?


      1. Jagan says:

        Thanks Manish !!!

        I dont trade a lot, i have a demat a/c in ICICI, in which i m not comfortable wit the brokerage that they charge, looking for a new account, kindly suggest !

        Would like to know the allocation charges & other charges for LIC market & profit plus plan. Could not find it online, it would be great if u help me !!


        1. manish says:

          Brokerage charges in ICICI is high compared to other companies , but I personally like the interface . You can go for Reliance money and Sharekhan

          Regarding LIC market plus you can contact an agent .


  5. Manish Chauhan says:


    Its too tough to answer .. now its more of trading rather than investing .. the best thing i would suggest is rebalancing your portfolio on a regular time interval ..

    BUt as you said .. that only there is a prolonged period of Bullish ness or bearish ness , then probably using NIFTY PE would be right thing ..


  6. abhishek says:

    I bought LIC's market plus ULIP policy (actually my dad's agent forced it on me :)) in 2007 @13.3/unit. Next years premium bought me units @9.6. When the market was in really bad shape during oct08-mar09, i bought TOPUP @~9. Currently the price is around 13.4. So, in my case, I guess, the topup was a good thing.

    I have a question here Maneesh, I guess somebody else have asked it before, what is the right time to exit, considering bear & bull phases are cyclic? I know it is impossible to time the market, but one can take advantage of prolonged periods of bull and bear phases rather than stay invested for long periods. Hope, i am able to put my question correctly.



    that was quick reply and that too as a post,
    thanks for clarifying the doubts manish,
    take care

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