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What Are ULIPs And What Are The Benefits Of Purchasing Them?

Published On Sep 26, 2021

ULIPs (Unit Linked Insurance Policies) are insurance policies that blend the ability to create wealth with the protection of life insurance. In ULIPs, a fraction of your payment goes into your Life Cover, while the remainder is invested in a fund that specializes in equities, debt, or a hybrid of the two. The success of the fund you choose will influence your investment returns.

ULIPs are a popular insurance and investment product. The dual character of these measures contributes to their popularity. They allow you to not only develop your wealth but also to contribute to the financial stability of your family in the case that you are unable to do so. Investing with discipline from the start will reap long-term rewards. The use of ULIPs instills such positive behaviors in you.

Benefits Of Purchasing ULIPs

Below are the different benefits of purchasing ULIPs:

1. ULIPs Offer Transparency

The way charges work in ULIPs is transparent, and the following elements help you make educated decisions:
Benefit illustration: It is your right as a customer to request a benefit illustration from a salesperson. A benefit illustration can assist you to comprehend how much money you've spent on premiums and how much money you've spent on your coverage. It also includes vital details regarding the potential returns based on the Sum Assured and premium selected.

Benefit pictures play a vital role in presenting the measurable aspects of ULIPs, but it's also crucial to grasp the other characteristics and benefits that ULIPs have to offer.

You may learn more about your policy's benefits by reading the product booklet. You'll receive a key feature paper once your policy is issued, which summarises the plan's essential features. This, in conjunction with the product literature, guarantees that you have a thorough grasp of the plan you've purchased.

2. ULIPs Encourage Savings With A Purpose

To attain key life goals including buying a home, paying for your children's school, or ensuring a pleasant retirement, you must save. ULIPs, which are long-term systematic investing alternatives, is one of the most practical ways to do so.

ULIPs are meant to help you invest your money in a disciplined manner and to help you achieve specific financial objectives. If you don't take this strategy, your long-term objectives may be risked in order to meet urgent needs.

3. Flexibility In Selecting A Fund Option

Most ULIPs provide a selection of equities, debt, and balanced fund options. As a result, you'll be able to invest your money based on your risk appetite and predicted returns. ULIPs also allow you to move your money across various funds, maximizing your returns.

4. Change Your Life Cover Whenever You Want

With ULIPs, you can choose your Sum Assured at the start of your policy. Some ULIPs additionally allow you to increase your Sum Assured over the course of the policy's term to meet your changing protection needs.

5. The Ability To Adjust Premium Investment

ULIPs allow you to pay a top-up amount on top of your existing premium. This option can help you get the most out of your investment.

6. Option To Add A Rider

Riders are optional elements that can be added to your ULIPs to personalize them and provide additional protection. The Unit Linked Tragedy and Disability Benefit Rider are among the most prevalent riders. It increases the amount of Life Cover the family receives in the event of accidental death. In the case of an accident-related incapacity, it also ensures that your Life Coverage is maintained.

7. Free-look Period

A free-look period is included with most life insurance plans, including ULIPs. This is usually a 15-day period in which you can cancel your insurance if you are unhappy with it. After deducting the appropriate expenses specified in the policy, you will be reimbursed for the entire payment.


A ULIP is an excellent plan to buy, as evidenced by the numerous benefits outlined above. As soon as your wealth increases, it contributes to a stable financial future. To find the best plan, always compare different ULIPs. You can compare plans quickly and easily to protect yourself and your family's future.

Also read - Understanding the Differences Between ULIP & SIPs

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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