The full form of ULIP is Unit Linked Insurance Plan. A ULIP is an insurance plan that offers the dual benefit of investment to fulfil your long-term goals, and a life cover` to financially protect your family in case of an unfortunate event. The premium paid towards a ULIP is divided into two parts.
If you want better returns as compared to other insurance policies, then ULIP is for you. ULIPs garner better returns than any other insurance product because of its equity advantage. ULIPs invest the premium paid by you in various asset classes through different funds
Since there is a lock-in period of five-years, it makes sense to check your own financial capabilities and goals because the insurance company will also charge if the plan is withdrawn before the completion of the lock-in period. Therefore, ULIPS are a secure option for long-term investments only.
The income plan is a guaranteed return insurance plan where the product provides guaranteed returns in the form of regular monthly income and a life cover. In a ULIP policy, the money is invested in equity funds, debt funds or hybrid funds. Hence, ULIP returns are based on market conditions and price fluctuations.
ULIPs provide the flexibility of premium payment. You have the option to move your money between equity and debt funds. ULIPs allow you to withdraw a part of your money whenever you need it. You can also choose where to invest, depending on your risk appetite.
