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A very popular plan in an insurance company’s kitty is a ULIP. ULIP plans give an individual the freedom to explore the capital market for investments while at the same time bestowing the all-too-important risk coverage. At a time when the share market and mutual funds were dominating individual’s investment portfolios, ULIPs were launched by insurance companies to lure customers with the promise of high investment returns. Today, ULIPs have become popular among many investors as these plans provide the dual benefit of insurance cover and wealth maximization. So, let us understand the concept of ULIPs in details.
Unit Linked Insurance Plan or ULIP is an insurance product which offers risk coverage to the policy buyer along with introducing the buyer to investment opportunities in the capital market. It provides a platform for the buyer to invest in different types of investment instruments such as stocks, bonds as well as mutual funds. ULIP can be classified as a two-in-one plan which aims at offering investment and protection to investors, which are customised according to individual requirements. As a comprehensive plan, the investment and protection part can be managed according to specific buyer choices and needs.
This plan requires you to pay the premium during the tenure of your employment. This amount is automatically collected as your corpus and is used to purchase an annuity post your retirement.
People invest in this plan in order to accumulate wealth over a period of time. This is a highly recommended plan for millennials in their late twenties and early thirties, so that they have the flexibility to fund any future financial goal.
Some ULIP plans also support a child's education. These plans protect your child's future in any unforeseen situation by pooling in some chunk of money. This ensures that the key events in your child's life never face a financial crisis.
In addition to the above, certain ULIP plans also assist in providing money in case of medical emergencies.
Under Type-I ULIP, the nominee gets the higher of Sum Assured or Fund Value as a death benefit to the nominee. However, in case the assured dies in the initial years of the policy, when the fund value is lower than the sum assured, the insurer will pay the agreed sum to the assured's nominee. But when the fund's value is more than the sum assured, the death benefit is an accumulated amount in the fund.
The nominee of the policyholder gets the sum of both i.e. Sum Assured and Fund Value in the event of demise of the policyholder. Usually, the insurance company charges extra for the added risk it assumes under the type II policy, from the policyholder.
These kind of funds give returns in a timely manner. For Fixed returns, insurance companies invest in debt funds, corporate bonds, government securities, etc. The risk factor in these funds is slightly high than Cash Funds. These funds are a combination of secured and unsecured investments.
Cash funds are considered to be the safest kind of investment. Cash funds are also known as money market funds through which the policyholder receives a set amount of returns upon maturity. These funds fall in the low-risk category.
These funds primarily invest in equities and stocks of companies. Equity funds are considered the riskiest ULIP investment, but they tend to offer the highest rewards. So if you have a high risk taking appetite, you should surely invest in an equity fund.
One of the most stable and prudent investments, balanced funds vary the amount of investment that goes to different places. With the money paid through premiums, insurers invest in fixed component like corporate bonds and varied components like stock market. Balanced funds hence, fall in the medium-risk category.
ULIPs offer flexibility in the following ways
ULIPs offer more than 6-7 types of investment funds to select from. Some of these funds are equity based which offer good market linked returns and increase the overall returns derived from a ULIP.
A ULIP offers the dual advantage of life cover and investment. Not only are you secured, but you also have the option to gain higher returns and build wealth.
Being an investment cum insurance plan with a long term investment horizon, a ULIP can be bought for meeting the expenses arising out of important milestones in life such as marriage, college education, etc. So, if you have a long term goal for yourself or your family, a ULIP is a good investment plan.
In case of an unforeseen event which leads to your demise, the ULIP will provide guaranteed death benefit to your wife and child. Thus, your child’s future will not get affected in your absence.
Retirement is an essential stage of every individual’s life. Over the period of investment, a ULIP scheme will gather enough corpus which can be utilised to live a stress-free life post retirement
ULIPs allow you to keep track of your investment portfolio. They also intimate you of the percentage of premium that is invested along with the charges levied regularly. As an investor, you are also kept informed about the value and number of fund units that you hold.
When choosing a Unit Linked Insurance Plan, one can decide the various fund options, based on the risk taking appetite. In case you wish to gain higher returns and have the capacity to take higher risks for the same, you can choose to invest in an equity fund. Hence, if you win, you earn big. However, if you wish to take lesser risk and are satisfied with medium to low returns, you can choose to invest in a debt fund. ULIPs also provide hybrid funds which suit an individual investor's needs.
Along with investment benefits, ULIPs also provide rider options for additional coverage to take care of your loved ones. With rider options such as accidental death rider, critical illness rider and term rider, you can rest assured that ULIPs not only take care of your insurance needs but are also beneficial for your family.
As ULIPs are life insurance products, they offer tax benefit in the form of deductions of premium amount up to Rs. 1.5 Lakh from ones taxable income and tax-free maturity or death benefit paid.
A ULIP is an excellent option for investment. Not only are you getting life cover for yourself and your family, but you have an opportunity to earn high returns and build wealth. ULIPs offer a wide range of investment funds which offer good market-linked returns. You also have the option to switch funds in case they are not performing well.
This was applicable to the early generation of ULIPs which were released during the initial years of ULIP schemes. This is no longer true as new generation ULIPs are relatively cheap and the cost is evenly distributed over the lock-in periods. Also, you have the flexibility to select premium payment terms and modes.
All funds which offer market-linked returns are bound to carry some risk. But in a ULIP, you can select the type of investment funds and revise your portfolio accordingly. This reduces the risk arising out of market volatility.
ULIP offers complete liquidity post the 5 year mandatory lock-in period. You can surrender the entire policy and receive the invested amount.
ULIPs provide excellent returns, certain plans even provide higher returns than a mutual fund. You can always select the fund portfolio as per your risk appetite.
All ULIP plans come with booster additions which add to your sum assured corpus. The additions happen over the tenure of the investment horizon.
All ULIP schemes can be discontinued any time but payout is made only post the completion of 5 year mandatory lock-in period. Additionally, you also have an option to revive a previous lapsed policy.
The life cover under a ULIP plan varies from policy to policy and the insurance service provider. It has got nothing to do with market volatility as the sum assured is guaranteed.
ULIP helps in building a regular habit of savings as you are required to submit the selected premium at regular intervals. The 5 year mandatory lock-in period prevents investors from withdrawing the money. This feature further helps to develop a huge corpus over the investment period.
Not only does a ULIP helps in growing wealth, but it provides comprehensive life cover for you and financial protection for your family. In case something happens to you in the future, your family will receive the complete death benefit as per the payout option.
Under a ULIP, you can choose between 6-7 or more different fund options as per your risk appetite. You also have the option to revise the investment portfolio and switch funds accordingly.
Premiums paid towards a ULIP scheme are eligible for deductions as per Sec 80C of the Income Tax Act, 1961. Also, the maturity or death benefit amount is also tax free as per Sec 10(10D).
ULIPs have great growth potential as they invest in the capital markets.
Staying invested in a ULIP for a long time rewards you with additional fund units.
The Loyalty Units feature for ULIPs makes policyholders eligible for additional units on maintaining a consistent record of timely premium payments over a long time.
While there are several ULIPs available in the market, certain plans stand out because of the benefits they provide for insurance and investment purposes. A few of them are
|Plan Name||Entry Age||Min. Premium||Premium Allocation Charge||Policy Admin charge||Free switches (annual)|
|Bajaj Allianz Future Gain||1 to 60 years||₹25,000||0% to 1.5%||₹33.33 p.m.||Unlimited|
|PNB Metlife Smart Platinum||7 to 70 years||₹30,000 to ₹60,000||1.25% p.a||₹40 p.m||4|
|MAX Life Fast Track Growth Fund||18 to 50 years||₹25,000 to ₹1 lakh||2%(Single Premium) to 4% (Annual premium)||₹1,500 p.m.||12|
|SBI Life Wealth Assure||8 to 65 years||₹50,000||3% of Single Premium||₹45 p.m.||2|
|HDFC Life Pro Growth Plus||14 to 65 years||₹2,500 to ₹10,000||2.5% of Annual premium||₹500 p.m.||Unlimited|
|Aegon Life iMaximise Secure Plan||7 to 55 years||₹24,000 to ₹36,000||Nil||₹100 p.m.||4|
|ICICI Pru Wealth Builder II||0 to 69 years||₹24,000 to ₹48,000||3-4%||₹500 p.m.||NA|
|SUD Life Dhan Suraksha Plus||8 to 50 years||₹24,000||6% of Annual Premium||₹6,000 per annum||1|
|Tata AIG Life Invest Assure II - Balanced Fund||4 to 55 years||₹75,000 to ₹1,20,000||5% of Annual Premium||0.25% of Annual Premium||12|
|LIC Market Plus - I Growth Fund||18 to 65 years||₹5,000 to ₹30,000||3.3%||₹60 p.m.||4|
ULIPs are suitable for all stages of life irrelevant of young or old age or married or married with children and so on. Each and every individual can invest through ULIPs
Your capacity for risk can determine the type of fund options under a ULIP scheme. If you have a high appetite for risk, you can switch to equity based investment fund which offer higher returns. For low risk appetite, you can invest in bond based funds. If you are looking at moderate risk, you can invest in hybrid funds.
It is not necessary for a person to be a hands-on investor for making an investment through ULIP. If you do not know much about ULIPs, the professional investment strategy provided by the insurer can take care of your investment needs.
LIP is the best option for everyone looking for options which have an investment horizon of medium to long term investment horizon. When equity investments are given the required time frame, they can provide the best returns among the various investment plans available.
Here's how a Unit Linked Plan works. You pay the premium in a ULIP. Alongside, there are several other investors who pay the premium and invest in the same portfolio. The insurer further pools this money, deducts the expenses, and invests the balance money depending on the type of funds chosen. These funds can be invested in either equity, debt or balanced funds.
This total corpus is further divided into units with a certain face value. The insurer allocates 'Units' to each investor in proportion to the invested money. This units value is termed as 'NAV' or Net Asset Value. Every insurer has a fund manager to keep a track of the invested funds. Based on market performance, the units NAV either increase or decrease, resulting in a higher or a lower NAV.
On the maturity of the ULIP, the insurer pays you the fund value depending on the market value. In case of any unforeseen situation like death, the insurer pays your nominee the higher of the sum assured or the available fund value.
|Criteria||ULIPs||Mutual Funds||Traditional Plans|
|Type||Investment cum Insurance Plan||Pure Investment Plan||Pure Insurance Plan|
|Investment||The money is invested in equity, debt or hybrid funds as per the investors selection||The money is invested in equity, debt and money market instruments as per investors decision||The money is invested in equity and debt instruments as per insurer’s decision|
|Liquidity||Post the mandatory lock-in period of 5 years||No such lock-in period||Investment is locked till maturity|
|Loyalty||They are given in the form of booster additions over the investment tenure||No such loyalty additions||Only participating plans offer loyalty additions provided you stay invested for a loner term|
|Risk||Moderate Risk||High Risk||Low Risk|
NAV stands for Net Asset Value. The NAV is the price per unit of a ULIP scheme. When you pay premium for a ULIP scheme, you are actually buying individual units of that particular scheme. The price per unit of a ULIP is called the Net Asset Value.
ULIPs have a mandatory lock-in period of 5 years. You can only withdraw from a ULIP post the 5 year time period.
The various charges levied as a fee under a ULIP scheme are:
The various types of riders offered are as following:
Dual Benefit: A Unit Linked insurance Plan is one of a kind Life Insurance plan where a policyholder has the dual benefit of investment as well as life cover.
Systematic Savings: Some people often tend to postpone saving for major future needs like child's college education, future mortgage payments or even retirement funds. This can be avoided by buying a Unit Linked Plan which ensures that you save systematically for your future needs.
Choose the type of Fund: Not everyone is willing to take a risk with their hard earned money, this is where a ULIP is the best option to choose as a Life cover. Depending on the financial needs and risk appetite a policyholder can choose to invest in cash funds, equity, balanced funds etc.
Freedom to switch between Funds: Depending on the constantly changing life situations and financial needs, the risk appetite of a person may also change. ULIP offers the freedom to switch between types of funds in such situations.
What is the meaning of ULIP?
ULIP is Unit Linked Insurance Plan, a market linked product that provides the benefit of insurance and investment under one comprehensive plan. A plan linked to the capital market, ULIP offers flexibility to invest in debt or equity based in the risk appetite of the investor.
What tax benefit is offered under a ULIP?
ULIPs offer tax benefits at the time of investment and on maturity of the policy. Money invested in ULIP can be claimed as a deduction under section 80C (life insurance) or 80CCC (pension). A maximum of Rs. 1,50,000 is allowed under section 80C/ 80CCC. You can obviously invest a higher amount, but the deduction will be limited to Rs. 1,50,000.
What is the NAV of ULIP?
NAV of net asset value of a unit linked insurance plan is the total value of its holdings net of admissible expenses. It is calculated by adding the ULIP’s holding on a specific day and deducting all liabilities like management fees, marketing expenses, operating expenses and other permissible expenses and charges.
What is the meaning of sum assured in ULIP?
Sum assured in ULIP is the minimum amount under death benefit which a nominee receives in case of death of the assured within the term of the policy.
What is the Maturity Benefit of a ULIP?
The amount of money which you will receive at the Maturity of your ULIP is called the Maturity Benefit of your policy. The Maturity benefit is calculated as the value of funds you choose to invest in.
How can I track my Fund Value?
To keep a track of your total Fund Value you need to know the Net Asset value of your funds. This NAV is determined everyday based on the market changes. Insurance companies publish an update for these values regularly.
If I am not happy with the returns, can I surrender my ULIP?
Yes, it is possible to surrender the policy by paying Surrender Charges after 5 years of lock-in period. But it is advisable to continue with the policy as in the initial years the policy may not yield higher returns due to Allocation Charges.
Can I borrow a loan against my ULIP?
Earlier it was possible to borrow loans against a Unit Linked Insurance Plan but according to new IRDA rule this is not an option anymore. Since ULIPs have an option of Partial Withdrawals, policyholders can withdraw some amount from their ULIP without asking for a loan.
How is the Death Benefit in ULIP calculated?
Based on the highest amount of Fund Value, Sum Assured or a Percentage of the paid premiums, the beneficiaries will be paid with the Death Benefit at the time of the policyholder's death.
What is the difference between death benefit and maturity benefit?
Unit linked insurance plans generally provide two kinds of benefits – maturity and death benefits. Maturity benefits are paid out by the insurance company when the policy has completed its full tenure and the policyholder survives the term. However, to receive this benefit, the insured individual must ensure that all premiums are paid on time. Once the policy has reached its maturity, the individual will receive the value of the fund, along with the loyalty benefits, if any.
Death benefits are paid out to the nominee(s) in the event the life assured passes away during the term of the policy. The nominee(s) stands to receive any one of these in the form of death benefits: i) sum assured or ii) sum assured or fund value, whichever is higher or iii) sum assured and the value of the fund, depending on the terms associated with the policy. The proceeds received in case of maturity of the policy or on the death of the life assured are tax-free under Section 10(10D) of the Income Tax Act, 1961.
What are the various riders? (Premium waiver, Income benefit, Critical Illness)
Riders are the additional benefits that can be included to ULIPs. It is an efficient way of customizing the ULIP to match the present and future needs of the policyholder.
Here is a list of riders that can be added to ULIPs:
Premium waiver rider – This rider waives off all the future premiums payable under the policy in case the proposer is unable to pay the premiums due to the occurrence of any unexpected events like death, accidental permanent total disability or diagnosis of critical illness.
Income benefit rider - In case of the demise of the policyholder, a monthly death benefit amount, which usually equals to 1% of the rider sum assured, would be paid for a specified period, as mentioned in the policy documents.
Critical illness rider - On first diagnosis of any one of the specified critical illnesses, a lump sum benefit will be paid out to the life assured. The number and type of ailments covered will vary from policy to policy.
Accidental death benefit rider - In the event of death due to an accident, the rider sum assured will be paid. This is over and above the standard benefit payable from ULIP. The death of the individual should be a direct result of the accident and within a certain timeframe of the date of the accident.
What is the tax treatment of investment plans?
The tax angle on ULIPs have made it an extremely popular choice among most investors. Tax deduction can be claimed on the premiums paid up to Rs. 1.5 lakhs under Section 80C of the Income Tax Act, 1961.
Maturity proceeds from ULIPs are tax free under Section 10(10D) of the Income Tax Act, 1961, provided that the annual premium paid is less than 10% of the sum assured for policies issued after 1st April, 2012. Death benefits payable to the nominee(s) in the event of the death of the life assured are tax free and does not attract any tax liability. If top-ups are included and premiums do not exceed 10% of the sum assured, tax benefits can be claimed on the top-ups under both Section 80C and 10(10D) of the Income Tax Act.
Are investment plans risk free?
ULIPs give investors the dual benefit of insurance and investment. Part of the premiums paid go towards insurance and the balance is invested in a fund of the policyholder's choice. The policyholder is given the option to invest in any number of qualified investments like stocks, bonds or mutual funds. Although ULIPs are largely an insurance tool, there are risks involved owing to the element of capital market investment. Under ULIPs, the investment risk is borne by the policyholder and not by the insurance company. Equity funds are recommended for individuals with a high risk appetite and whose aim is capital appreciation. Debt income funds are more suitable for individuals who only want exposure to low risk, and whose aim is capital preservation. Finally, balanced funds are an appropriate choice for those willing to take on medium-high risk and want moderate level of capital appreciation.
Can I withdraw my investments?
One of the biggest perks of ULIPs is its partial withdrawal feature. ULIPs give policyholder the flexibility to partially withdraw some amount from the accumulated Fund Value before the end of the policy term. The partial withdrawal facility can only be availed after the policy has completed its lock-in period, which is 5 years. While there are no rules on how much a policyholder can withdraw, every policy will have its own specific limit and this will vary from insurer to insurer, policy to policy. It must be noted that a policyholder cannot withdraw the entire amount from the fund without surrendering the policy.
What do we mean by lock in period?
A lock-in period is a period of time wherein the policyholder of a ULIP cannot liquidate nor make any withdrawals from his or her policy. If one wishes to discontinue the policy during the lock-in period, the insurance company will move the fund value to discontinued fund, after applying a surrender charge. The funds will only be paid back once the lock-in period is complete. The Insurance Regulatory and Development Authority of India has raised the lock-in period for ULIPs to 5 years on September 2010 from the earlier lock-in period of 3 years to promote long-term saving habits among investors and weed out mis-selling.
What are the various charges in a ULIP Plan? Do all plans have the same charges?
ULIP offered by different insurance companies have varying charges. While the structure of charges differs across insurance companies they have a maximum cap on it as per the guidelines issued by IRDAI applicable to all insurers, but broadly here are the different kinds of fees levied on ULIPs:
Premium Allocation Charge - Premium allocation charge is deducted upfront from the premium. This is levied as a fixed percentage of the premium, prior to allocating the units under the policy.
Fund Management Charge – Insurance companies levy fund management charges for managing various funds in a ULIP. It is deducted before arriving at the net asset value.
Mortality Charges - Mortality expenses are charged on the insurance component. When a policy is issued, the insurance company assumes that the life assured will at least live to a specific age. The mortality charge compensates the provider, in case the individual does not live to the assumed age.
Policy Administration Charge - As the name suggests, policy administration charges are levied for the administration of the policy. It is charged on a monthly basis.
Partial Withdrawal Charge - After the policy has completed its lock-in period, policyholder can avail the partial withdrawal facility. Such withdrawals may be free up to a certain limit and then the insurance company may levy a fee per withdrawal.
Fund Switching Charge - A policyholder is allowed a limited number of free switches between different fund options. With subsequent switches, charges may be imposed according to the insurance company's charge structure.
Discontinuance charge - If the policyholder stops premium payments before the lock-in period is complete, his or her money will be transferred to a Discontinuance Policy Fund, after discontinuance charge is deducted in the policy.
Premium Redirection Charge - Premium redirection refers to redirecting future premiums payments into another fund option. After a policyholder has exhausted the limit on the number of times he or she can redirect premium payments for free, charges will be levied.
What is fund switching in ULIP?
To safeguard the policyholder's returns from market volatility, ULIPs offer a variety of options – fund switching facility being one of them. Policyholders can move their investments between different asset classes like equity, debt and balanced, as per their risk appetite and financial goals of the policyholder. Units can be transferred partially or completely into different fund options. Some insurance companies allow unlimited switch options, while others have a limit of 5 to 10 switches in a policy year. To generate good returns on investments from the switch, the policyholder needs to constantly review and monitor his or her plan’s NAV, given that the market conditions change frequently.
Which is a low-cost ULIP that can only be bought online?
ULIPs are insurance cum investment plans that provide risk cover for the policyholder, along with investment options to park funds in stocks, bonds or mutual funds. Online investment plans like HDFC Life Click2Invest, SBI Life - eWealth Insurance and Max Life Online Savings Plan are some great options that individuals looking for ULIP schemes can consider. The charges associated with these investment plans are easy on the pocket and can be availed anytime over the web. Investors are advised to consider some of the recently launched ULIP as they fare better than the older ULIPs on account of the lower charges.
How to revive lapsed ULIP?
A policy is regarded as lapsed when an individual fails to make premium payments, not just by the due date, but even during the grace period. A unit-linked insurance plan (ULIP plan) lapses when one skips paying the premium in the first 5 years, or during the lock-in period. The money is then moved to the discontinuance fund and a discontinuance charge is levied. To revive a lapsed ULIP plan, insurance companies generally give a window of at least 2 years. If an individual chooses to revive a lapsed ULIP plan during this period, then discontinuance charges levied upon revival will be reversed.
Why should I start planning my savings now?
The earlier you start, the money gets a longer time period for growing. A longer time period of investment beats market volatility and yields good returns.
Can US NRI invest in ULIP?
Yes, NRIs can invest in ULIP schemes
Does ULIP come under LTCG?
No, it does not come under LTCG
Is HDFC click to invest a good plan?
Yes, it is one of the best selling plans
How to find the right time to invest in ULIP?
One must start investing at the earliest possible to get the best returns from ULIPs.
Is surrender value of ULIP taxable?
No, the surrender value of ULIP is not taxable.
What is absolute return ULIP?
Absolute return is the return that a ULIP achieves over a period of time.
What is the difference between SIP and ULIP?
A Systematic Investment Plan is a mode of investment in mutual funds while a ULIP is an independent investment plan.
What is fund value in ULIP?
The total fund value in a ULIP is the prevailing price of the ULIP plan i.e. NAV multiplied by the total no. of units available in the policyholders account.
What is premium allocation charge in a ULIP?
These charges are levied before the premium is paid by the investor. They are the initial charges imposed by the company.
What is ULIP policy in LIC?
ULIP plans offered by LIC are similar to the ones currently available in the market. At the time being no ULIP Plans are available for purchase from LIC.
When was ULIP introduced in India?
The first ULIP was launched in India during 1971 by Unit Trust of India.
What is the meaning of sum assured in ULIP?
Sum Assured is the guaranteed amount which the ULIP will pay to the policyholder in the form of death/maturity/survival benefit.
What is maturity benefit of a ULIP?
This is the fund value payable to the policyholder when the policy reaches the date of maturity.
How can I track my fund value in a ULIP?
To keep a track of your total Fund Value you need to know the Net Asset value of your funds. This NAV is determined everyday based on the market changes. Insurance companies publish an update for these values regularly.
What is a ULIP Fund and what type of funds do ULIP Plans offer?
United Linked Insurance plans or ULIP is a combination of investment and insurance. In this plan, the policyholder has the option to pay premium on monthly, quarterly, half-yearly or annually or even as a lumpsum. While a certain amount of the premium goes to provide life cover, the rest of the amount is invested, similar to a mutual fund. The different types of funds ULIPs offer are-
1) Cash/debt Funds (Low risk) – Often known as Money Market Funds, these funds invest in cash, bank deposits and money market instruments 2) Income, Fixed Interest and Bond Funds (Medium risk) – These funds have medium risk and invest in corporate bonds, government securities and other fixed income instruments 3) Equity Funds (Medium to High risk) – These primarily invest in company stocks with the primitive aim of capital appreciation 4) Balanced Funds (Medium risk) – These funds are a combination of investment in equity and fixed interest instruments
What is Ulip NAV?
In Unit Linked Insurance plans, a number of investors pool money together to make one large investment sum. This amount is then invested in numerous capital market instruments. In order to enable the company to divide the returns amongst the investors in a proper manner, the fund manager divides the total investment corpus into smaller units which have a particular face value. The formula used to calculate the NAV is as follows:
NAV = (Value of Current Assets + Market Value of Investments Held) - (Value of Current Liabilities & Provisions) / Total number of outstanding units on date
What Ulips are available for different classes of Investors?
The ULIPs available for different types of investors are-
1) Cash/Debt Funds (Low risk) – Often known as Money Market Funds, these funds invest in cash, bank deposits and money market instruments 2) Income, Fixed Interest and Bond Funds (Medium risk) – These funds have medium risk and invest in corporate bonds, government securities and other fixed income instruments 3) Equity Funds (Medium to High risk) – These primarily invest in company stocks with the primitive aim of capital appreciation 4) Balanced Funds (Medium risk) – These funds are a combination of investment in equity and fixed interest instruments
Why is ULIP a good investment Product?
ULIP is considered a good investment product as the premium can be either be paid monthly, quarterly, half-yearly or annually or even as a lump sum. Also, ULIPs have the potential to fetch better returns as compared to any other insurance product because they have an equity advantage over others traditional investment options. Moreover, ULIPs invest the premium paid by the investor in numerous asset classes through various funds.
Examples of Ulip Plans by insurance company.
ULIPs or Unit Linked Insurance Plans are a product which are offered by insurance companies that give investors both insurance and investment under an integrated plan, unlike a pure insurance policy. Some of the best ULIPs offered by insurance companies in 2019 are-