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Unit Linked Insurance Plans - Key Features, Benefits, Exclusions, etc.

In a single plan, a Unit Linked Insurance Plan (ULIP) combines insurance and investing. It's a capital market-linked plan that allows you to participate in either equities or debt funds depending on your risk appetite. In a nutshell, it enables you to gain from both investing and insurance.

When you purchase a ULIP, a portion of your premium is invested in bonds or stocks by the insurance company. The remainder is utilized to cover the remaining costs. As an investor, you don't have to worry about keeping track of your investments on a regular basis because the duty is handled by the insurance company's fund managers. You can also switch between debt and equity funds in your portfolio. The locking term for ULIPs is five years.

Unit Linked Insurance Plans - Key Features, Benefits, Exclusions, etc.

Below are a few things to know about key features, benefits, and exclusions of a ULIP:

1. Types Of Unit Linked Insurance Plan

The purpose of ULIPs can be categorized. They include the following:

  • Health Advantages: Diseases and diseases might hit us at any moment and in any place. In times of personal difficulty, United connected health insurance offers financial aid to cover astronomical medical costs.
  • Education for Children: Every parent desires for his or her child to have a successful future. You might choose child plans that are unit-linked insurance plans to eliminate the potential of any form of the impediment to your child's career growth. These are a mix of insurance and investing.

2. Documents Required For ULIP Purchase

Keep the following documentation on hand when acquiring a ULIP to avoid any delays.

  • Proof of age: driver's license, passport, or voter's identification card. PAN card as proof of identification. Driver's license, passport, or voter's ID are all acceptable forms of proof of address.
  • Proof of earnings: Details of income tax returns, pay stubs, bank records, and so on.

3. Consider These Factors Before Buying

Before you acquire a ULIP, be sure you understand why you want one and how it will help you improve your financial situation. Let's have a look at some of them to see if they can assist you in making the best option possible.

ULIP might be one of the bankable solutions if you want to build savings for future security such as family betterment, a child's future and marriage, and your retirement.

Comparing insurance policies: First and foremost, you must choose coverage that meets your needs. Then, in order to assess the returns of that particular ULIP, you must analyze the available ULIPs in the market in terms of fees, premiums, performance, and the types of funds it invests in.

4. Riders

Additional perks, sometimes known as riders, are available to ULIP investors for an additional fee. These riders enhance the plan's value while also allowing you to tailor it to match your current and future financial goals. The several sorts of riders available to you are listed below:

Permanent Disability and Accidental Death Benefit Rider: During the policy's term, the assured may be involved in an accident that results in permanent disability or death. The nominee is entitled to the base plan sum plus the rider benefit provided by the assurer in the event that the assured individual dies. The primary purpose of this rider is to give additional coverage to the life assured's family. If the life guaranteed is permanently disabled or handicapped as a result of the accident, he or she may not be able to work or earn money in order to pay the premiums.

5. Exclusions

ULIPs do not cover all types of circumstances. Exclusions are another term for them. You should be aware of these situations before finalizing your insurance plan so that you don't have any issues filing claims.

  • Under the influence of alcohol, death by accident
  • Suicide-related death
  • Drug- or alcohol-related death
  • Racing or other dangerous sports can result in death


An insurance policy's main goal is to protect your family financially in the case of a disaster. You can choose from a range of programs depending on your life stage and needs, such as pure protection, savings, kid education, retirement (wealth creation), and so on. The Unit Linked Insurance Plan is one such product that may be used as both an insurance and an investment tool (ULIP).

Also read - How To Select Best ULIP For Yourself?

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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