How To Choose The Right ULIP For You?

Insurance companies created ULIPs to attract customers with high investment returns during the mutual fund and share market boom. Insurance companies’ most popular investment products are ULIPs.

A simple guide to choosing ULIPs and how they help you reach your financial goals:

Which Indian ULIP Plan Is Best?

  • Choose ULIP Funds Based on Goals
  • Select Required Life Insurance Cover
  • Long-Term ULIP Investments
  • Long-Term ULIP Investments
  • ULIP Costs
  • Tax Benefits
  • ULIP Features

To choose the finest Indian ULIP plan, consider the following:

Fund option per your goal: ULIPs let you invest in debt, equity, or a mix of both funds. Equity funds offer long-term gain, while debt funds preserve wealth. You can choose financing or equity depending on your goals and risk tolerance. You can also relocate your ULIP funds as needed.

Choose the Required Life Insurance Cover: ULIPs assist investors in achieving long-term financial goals like children’s further education, marriage, etc. ULIPs also protect the policyholder’s dependents financially. Thus, you must choose the right life insurance coverage to meet your future demands.

Long-Term Investments with ULIPs help you achieve financial goals and build wealth. ULIP providers can offer Wealth Boosters and Loyalty Additions to long-term investors.

ULIP Costs: ULIPs have five fees:

  • Allocation Fees
  • Administration Fees
  • Management Fees
  • Death Charges

Benefits: ULIPs offer tax savings under the Income Tax Act 1961. These tax savings are dependent on the old regime and the new regime. These benefits are subject to changes in the Income Act the government might introduce. ULIPs offer tax exemptions:

  • Initial: Advantage: Premiums are tax-deductible under 80C, 80D, and 80CCC.
  • Stage Two: Money Growth: Tax-free.
  • Stage Three: Switching Benefit: Switch between equity and debt funds tax-free.
  • Stage Four: Exit Benefit: Tax-free maturity.
  • ULIP Features: Features are the final factor in choosing the finest ULIP plans in India.
  • ULIPs allow you to invest future premiums in funds other than your necessary funds. You can check the ULIP calculator to understand the plans better.
  • Top-Ups: You can invest extra money in your plan often or once.
  • Fund Switches: Know your ULIP plan’s accessible switches. Most insurers offer free debt-to-equity fund transfers.
  • Partial Withdrawals: ULIPs allow partial withdrawals. This feature usually activates after the lock-in period.

How Do ULIPS Work?

ULIP works easily. The plan offers you the dual benefits of investment and insurance under a single policy. You get to invest in debt, equity, or balanced funds. The financial corpus is then separated into face-value units. Learn more about ULIP benefits before choosing any plans.

Investors receive “Units” based on their investment.

Every insurance company needs a fund manager to track assets. NAV fluctuates with market performance.

The insurance company pays market value at ULIP maturity. The insurance company pays the higher fund value or sum assured if death occurs.

ULIP Lock-in and Charges

The finest Indian ULIP plans need a five-year lock-in. ULIPs are withdrawable after five years. ULIP fees include the following:

  • Administration fees
  • Fund management fees
  • Surrender charges
  • Allocation Premiums
  • Death fees
  • Refunds
  • Switching fees

 NAV in ULIPs?

Net Asset Value (NAV) ULIP price/unit. Paying their ULIP premium buys units of that scheme. Net Asset Value is a Unit Linked Insurance Plan’s unit price.

ULIP Purchase Eligibility

Your ULIP scheme’s entrance age must be met.

Follow the plan’s premium payment method.

ULIP documents

Earnings: The finest ULIP plan in India requires income proof. Bank statements, wage proof, IT returns, etc., can prove income.

ID: Aadhar, PAN, voting, etc.

Address proof: Aadhar, driving licence, passport, voting card, etc.

Age: Passport, Aadhar card, driving licence, voting card, etc.


Why acquire a ULIP plan:

  • Liquidity: After five years, you can easily surrender your ULIP scheme. After the lock-in, you can withdraw partially.
  • Transparent: ULIPs are transparent to policyholders. Policy documents explain charges. You will also learn about the funds and units your money is invested in.
  • Low charge: After five years, you can surrender your ULIP plan for low fees. You must pay surrender charges if you submit your ULIP before five years. ULIP surrender charges have decreased, making it easier for investors to exit the fund in an emergency.
  • Life cover: ULIPs offer life insurance and investing. This protects your family and increases your money.
  • Customisable and dual offers: ULIPs are very configurable. Your insurance provider’s fund list allows easy switching. As indicated, ULIPs provide insurance and investment.
  • Systematic Savings: Some people wish to postpone saving for significant future expenses like child education or mortgage payments. A ULIP can help you save for the future.

In conclusion

After choosing the top ULIP, review its benefits and features. Thus, read your policy carefully. This will aid your choice. Refer a ULIP calculator to understand the ULIP benefits.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.