Unit Linked Insurance Plan (ULIP)

Unit Linked Insurance Plan (ULIP) is a type of Insurance combining benefits of both, protection and saving in one plan. ULIP's major advantage is that besides having better wealth creation tools, it also has the benefit of a Life Cover. Thus, your funds grow along with your loved one’s future being protected from unexpected situations.

How ULIPs work?

ULIP is an insurance policy and an investment tool. The policy factor defines a death benefit, which is the amount the nominee will receive if the policyholder passes away during the ULIP term. If the policyholder survives the term of the ULIP, he/she will also get ULIP's maturity value, the amount generated by ULIP investments in equity and/or debt. The policyholder is usually given the chance of choosing ULIP funds and asset classes to generate its returns. This advantage is the key factor for the investment component in a ULIP. Moreover, even if ULIP investments value drops below the sum assured specified in the ULIP, the policyholder’s nominee(s) will receive the death benefit as specified.

Types of ULIP Plan 

When investing in a ULIP plan, it enables you to acquire wealth in the personalized way, where savings are maximized as per your financial disposition and risk appetite to support various life goals. The various types of ULIP plans are listed below:

ULIP Plans for Retirement: If you invest in ULIP plan for retirement, you'll pay premiums during the premium payment tenure. Upon maturity of the ULIP plan, you'll then receive the accumulated wealth to support the lifestyle requirements post-retirement.

ULIP Plans for Wealth Creation: Purchasing a ULIP plan for wealth creation enables to accumulate the desired amount of wealth within specific periods basis market returns. This type of plan is suitable for investors who desire to contribute a portion of their earnings towards ensuring long-term financial stability.

ULIP Plans for Children: Parents will always strive to provide the best possible upbringing and thriving future for their children. By investing in this essential ULIP plan, as a parent you'll have the assurance that your child's life goals will be secured financially, even if something happens to you, and/or you are not there with your family.

Benefits of ULIPs

  1. Fund Switch – This is an option in which money can be moved between equity, balanced and debt funds
  2. Premium Redirection – This option allows to invest the future premium in a diverse fund as desired
  3. Partial Withdrawal– One can withdraw a portion of its money
  4. Top-up – This is an option where one can invest additional money to its existing savings

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