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How to Compare and Buy ULIPs in India?

Updated On Sep 11, 2021

Are you looking forward to investing in a worthwhile plan? Have you been searching for options all these days? If planning to start your investment journey with a superior policy by your side, know that you can consider a ULIP. ULIP or Unit Linked Insurance Plans are insurance policies that enable wealth creation apart from offering life insurance cover. Gaining popularity in India, ULIPs are one of the best plans to invest in if looking for a product that lets you earn good returns, grant you the security of a life cover and reap tax benefits on those investments. Designed to deliver security as well as stability, ULIPs are an excellent choice for investors looking forward to investing in the long term and gaining market benefits. 

If you too are planning to buy one of the best ULIPs, remember that it would require you to perform a comparison of all the ULIP options available. 

How to Compare ULIPs in India?

The key aspects based on which you should perform a comparison of ULIPs are:

  • Charges & Levies: It is important to note that insurance companies levy various types of charges on ULIPs. Fund management charges, mortality charges, premium allocation charges, administration and service charges, and others are a few. Make sure you emphasize charges and levies by the insurance companies during your ULIP selection. Additionally, note that it would also be important to know the premium amount to be paid in order to gain life cover. Remember, these charges have an impact on the final returns of the plan, so it would be better to invest in a ULIP with lower charges. 

Also Read - Is Ulip A Good Investment?

  • Life Cover & Tenure: ULIPs come with a mandatory lock-in period of 5 years. As far as the tenure is concerned, it is much longer. What’s important to note is that different insurance companies provide different tenure terms for their ULIPs. It is highly recommended that you choose a ULIP with a longer tenure as these plans are designed to build wealth over the long term. Moreover, one gets the benefit of the power of compounding by investing in it for a longer period. The size of the life cover provided by the policy must also be considered while performing plan comparison. Make sure you select a plan that offers a large life cover at lower mortality charges.
  • Fund Options & Switches: As an investor, you may want an option that comes with the flexibility to choose from a vast array of funds. Keep in mind that not all ULIPs have the same number of funds with different asset allocations for you to choose from. It is advised to select a policy that offers you more choices to find the perfect option that fits your risk profile as well as an investment goal. Yet another thing to note is that with time, you may want to switch your money from one fund to another. Most policies allow only a limited number of switches. So, make sure you choose the policy with the maximum allowed switches. 

How to Buy ULIPs in India?  

Buying a ULIP would be quick and simple through the online mode. All it would require is your ID proof, age proof, address proof, a recent photograph and other significant documents in sync with underwriting documents. Make sure you check the eligibility criteria and check the calculator for ULIP premium.

You may also like to read - Can I Stop A ULIP?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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