ULIP - Unit Linked Insurance Plan

Unit Linked Insurance Plans or ULIPs are a type of life insurance plans. ULIPs are a blend of life insurance and investment. It is a financial tool that provides dual benefits of life cover and allows the life assured to grow their wealth by investing their money in different market linked fund options. Under unit linked insurance plans part of the premiums paid are utilised for life cover and the remaining portion is used to invest in market linked fund options chosen by the life assured. One can switch fund options in case they are not satisfied with the performance of the fund option chosen. Returns under an ULIP depend on the performance of the market linked fund option.

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What is ULIP or Unit Linked Insurance Plan?

ULIP or Unit Linked Insurance Plan is a life insurance product. It is a combination of life insurance and investment. A great financial tool, ULIP plans require the policyholder to make regular premium payments. ULIPs are a popular financial instrument that creates a corpus for you, thereby maximizing your savings.

In ULIP or Unit Linked Insurance Plans one portion of the premium paid is used for life insurance cover, while the other is used for investment purposes. The investment is made after the insurance company has deducted charges such as fund allocation charges, policy administration charges, fund management charges and mortality charges.

Types of ULIP Insurance Plans

Following are the types of ULIPs based on the kinds of funds they invest in:

  • Equity - The money of the investor is used for purchasing equity shares of one or more companies. It is an ideal choice for investors with a high risk appetite.
  • Debt - Here funds are invested in debt instruments like corporate bonds, Government bonds & securities, debentures, and fixed income bonds. While the risk ranges between medium to low, the returns associated are also only moderate.
  • Liquid Funds - This ULIP type is perfect for meeting short-term financial goals. Here, the investor's funds are parked in highly liquid money market instruments. Also the maturity period ranges between a few weeks to months.
  • Balanced Funds - Here the money is invested in both equity and debt instruments. The returns are more stable in this type.
  • Cash Funds - Ideal for investors who do not have a high risk appetite, cash funds are the ULIP type that offer low returns.

Benefits of ULIP Insurance

Key benefits of ULIPs are:

  • Market Linked Returns - ULIPs helps in earning market-linked returns by dedicating a portion of the premium invested into debt and equity instruments.
  • Life Protection with Savings - ULIPs provide the dual benefit of life insurance protection as well as savings.
  • Flexibility - ULIP or unit linked insurance plans come with the flexibility to switch between investment funds, make partial withdrawals during emergencies, make single premium additions to invest additional sums of money.
  • Tax Benefits - Premium paid towards ULIP plans is eligible for tax deduction under Section 80C of income tax 1961, up to a maximum of Rs. 1.5 lakh. Also, the maturity/death benefit received under the ULIP plan is free from tax under Section 10(10D) of the Income Tax Act 1961.

Why Choose InsuranceDekho?

A few reasons why you should choose InsuranceDekho to buy ULIP:

  • Quick Policy Issuance: At InsuranceDekho, you can quickly get your ULIP issued. All you need to do is provide personal details, compare available options, purchase the best plan, make the payment & submit the desired documents.
  • Committed Customer Service: InsuranceDekho has a customer assistance team available 24x7 to provide the best possible solution to all your ULIP related queries.
  • Availability of Top Plans: InsuranceDekho has partnered with the best life insurance plans in India to provide a wide range of best ULIPs at reasonable premium rates.

How To Buy ULIP With InsuranceDekho?

Here’s how you can buy ULIP with InsuranceDekho:

  • Enter Details: Provide your name, mobile number, gender and date of birth. Click on the ‘View Instant Quotes’ button to check available quotes.
  • Insurance Quotes Comparison: You will find different ULIP insurance quotes based on the details provided. Compare the available plans and select the one that suits your requirements.
  • Make The Payment: After choosing your ULIP, adjust the sum assured and the policy term. Make the payment for the premium once everything is finalized via netbanking or debit/credit card.
  • Submit Necessary Documents: Submit desired documents like photo ID proof, address proof, age proof, and a passport size photograph along with required medical records.

FAQ About ULIP - Unit Linked Insurance Plan

  • What is the fund value in ULIP?

    Fund value is the total monetary worth of the units that a policyholder owns. 

  • What is the sum assured in ULIP?

    Sum assured in ULIP is the minimum guaranteed amount that a nominee receives in the event of policyholder's death. 

  • What is the lock-in period of ULIP?

    The lock-in period of ULIP is 5 years. 

  • Can I withdraw my ULIP funds anytime like in the case of mutual funds?

    No! You can withdraw funds only after 5 years. 

  • Can I get my ULIP premium refund if I am unsatisfied?

    Yes! You can request a refund after 15 days of free-look period. 

  • Why should I buy a single premium ULIP?

    You can buy a single premium ULIP if you don’t want to pay the premium regularly and a policy lapse. 

  • What are the ULIP options available under LIC?

    Some of the key ULIP options available under LIC are Nivesh Plus, SIIP, and New Endowment Plus.

  • Which section covers ULIP for tax deduction?

    ULIP is covered for tax deduction under Section 80C of the Income Tax Act, 1961.

  • Why should I buy ULIP?

    You should buy ULIP if you want life insurance cover, income tax benefits, finance long-term goals, and switch your investment portfolio. 

  • Are ULIPs the same as mutual funds?

    No! ULIPs and mutual funds differ based on features like nature, withdrawal, switching and charges. 

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