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life insurance

UNIT LINKED INSURANCE PLANS

A Unit Linked Insurance Plan (ULIP) is an insurance product that combines life cover as well as investment.


The insurance provider invests the collected premium in various investment schemes and thereby helps customers to grow their money along with insurance protection.

Four types of ULIP fund options:

  • Equity Fund
    These are high risk avenues that allocate funds in shares. The expected returns from this kind of policy are high and are ideal for long term wealth creation.
  • Balanced Fund
    Such a fund distributes a part of the premium toward high-risk equity units and the rest toward fixed interest units. This has medium risk, because the high risks of the equity units are balanced by the lower risk of the fixed interest units.
  • Debt Fund
    These invest the premium in corporate bonds, government securities and other fixed income instruments. As a consequence, these have medium risk.
  • Secure Fund ULIPs
    This type of fund carries incredibly low risk. The funds are invested in instruments like cash and bank deposits. Returns from these plans are comparatively low.