Insurance · Investment · Market Linked
Unit Linked Insurance Plans (ULIPs)
A life insurance product that combines life cover with market-linked investment through a choice of funds.
Life Cover
Life insurance protection during the policy term.
Market Linked
Investment value linked to selected funds.
Fund Switching
Switch between available funds subject to policy terms.
5-Year Lock-In
Generally subject to a mandatory five-year lock-in.
IRDAI Regulated
Governed under the applicable life insurance framework.
Overview
What Are Unit Linked Insurance Plans?
ULIPs combine life insurance protection with market-linked investment. A portion of the premium supports insurance and applicable charges, while the remaining amount is invested in selected funds.
Market-Linked Investment
Equity Funds
Higher equity exposure with greater growth potential and market volatility.
Debt Funds
Invest primarily in debt and fixed-income instruments with a different risk profile.
Hybrid Funds
May combine equity and debt to provide diversified asset allocation.
Fund availability varies by insurer and product. Investment value can rise or fall based on market performance.
Eligibility
Who Can Buy a ULIP?
- Individuals meeting the insurer's eligibility criteria
- Minimum and maximum entry age vary by product
- Policy term and premium payment term vary by product
- Medical and underwriting requirements may apply
- Premium and sum assured limits depend on the policy
KYC
Documents Required
- PAN, Aadhaar, Passport or other accepted identity proof
- Address proof as required by the insurer
- Age proof such as birth certificate or passport
- Income proof where required
- Medical information or examination, where applicable
How It Works
Premium, Protection & Investment
Premium allocation
The premium is allocated according to the policy structure. Applicable charges and insurance costs are deducted as specified in the policy.
Fund value
The remaining amount is invested in selected funds. The fund value changes according to the NAV and market performance.
Key Benefits
Why Consider a ULIP?
- Life insurance protection during the policy term
- Access to equity, debt and hybrid investment funds
- Fund switching facility subject to policy terms
- Potential for long-term market-linked wealth creation
- Visibility into NAV, units and fund value
Lock-In & Withdrawals
Five-Year Lock-In & Partial Withdrawal
Lock-In
Generally 5 years
ULIPs are generally intended as long-term products. Surrender and discontinuance are subject to applicable rules and policy terms.
Partial Withdrawal
After applicable lock-in
Withdrawals may be permitted subject to the product's limits, number of withdrawals, charges and policy conditions.
Fund Management
Switch Between Available Funds
Many ULIPs allow policyholders to switch between available funds. This may allow you to adjust your allocation based on changes in your financial goals, risk tolerance or investment horizon. The number of free switches and applicable charges depend on the policy.
Charges
Understand the Costs
- Fund management charges
- Mortality charges
- Policy administration charges
- Premium allocation charges, where applicable
- Discontinuance or surrender-related charges, where applicable
- Switching charges, where applicable
Where to Buy
Life Insurers & Authorised Intermediaries
ULIPs may be purchased through life insurance companies, authorised agents, registered brokers and other authorised intermediaries.
Tax Treatment
Tax Benefits Depend on Applicable Rules
Eligible ULIP premiums may qualify for tax deductions subject to applicable conditions. Tax treatment of maturity or redemption proceeds depends on the policy's issue date, premium conditions and applicable income-tax provisions. Tax laws can change, so individual tax advice may be appropriate.
Things to Know
Before You Buy a ULIP
- ULIP returns are not guaranteed and depend on market performance
- Investment risk is borne by the policyholder
- ULIPs generally have a five-year lock-in period
- Charges can affect the long-term fund value
- Fund options, switching rules and withdrawals vary by policy
- Tax treatment depends on applicable income-tax provisions
Is a ULIP right for your financial goal?
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