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Things You Should Know About ULIPs

Updated On Apr 23, 2021

Unit-Linked Insurance Plans (ULIPs) are a great way to get insured because they also provide you an opportunity to grow your money with utmost ease and comfort. Therefore, not only can you save your hard-earned income but also grow it in a fruitful and efficient way. ULIPs are transparent and flexible plans that provide one of the best investment experiences.

Whenever you are deciding on purchasing a policy, you must always study it carefully beforehand. Being equipped with knowledge about its features and benefits will help you make the most use of them. Read on to find out things you should know about ULIPs.

You May Also Like to Read:- Difference Between ULIPs And Mutual Funds

Things You Should Know About ULIPs

The following are a few important things you should know about ULIPs:

1. They Provide a Life Cover

Besides investing your assets, ULIPs also provide you with life cover. With regular payment of premiums, you will be able to get life cover under a ULIP. In case of an unfortunate death of the life assured, a ULIP provides a death benefit to the nominee to help them remain financially sound at the time of emotional grief.

2. They Feature A Number of Fund Options

One of the biggest reasons why ULIPs are popular is because they provide a variety of market-linked fund options to invest in. You can invest in cash funds, equity funds, debt funds and more. You can even switch between fund types. There are usually no charges for this and you do not even have to pay taxes on the switch.

3. They Offer Partial Withdrawal Benefit

Unlike most investment plans, ULIPs are not that binding when it comes to investing your assets. In times of crisis, or essentially at any time, you can withdraw a portion of your assets. This is of immense help as it assures you of not having to liquidate your assets if such a situation does arrive.

4. They Offer Loan Facility

Having a ULIP helps immensely when you want to take a loan against it. There is often less documentation and scrutiny involved. Additionally, you may get lower interest rates and faster approval from the lending company.

5. You Can Opt for Riders With ULIPs

You can purchase a variety of riders to add on to your existing, basic ULIP. Riders are available for many purposes, and the choice of them depends entirely on your needs and circumstances. From critical or terminal illnesses, to disabilities or accidents, having a rider safeguards you against many unprecedented circumstances.

6. ULIPs are Long-Term Investments

ULIPs are the most beneficial when you hold on to them for a long time. Regular payments help you stay disciplined as an investor while you get high returns as your money gets compounded annually. Plus, you are also provided benefits like adders and more. 

Also Read:- Insights On ULIPs VS Traditional Life Insurance Plans

5 Popular ULIP Myths Clarified


ULIPs are therefore a valuable and efficient way to invest as well as get life cover. Not only do you grow your hard-earned income in the present but also assure financial stability for yourself and your family members in the future. There are multiple companies providing ULIPs currently but the basic features of all of them largely remain the same. 

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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