ULIP – Unit Linked Insurance Plan – Top ULIPs in India

ULIP or Unit Linked Insurance Plan are very beneficial investment tools for those who want a like cover along with their good returning investments. This post discusses the ULIP or Unit Linked Insurance Plan with their working along with top ULIPs in India.


ULIP Unit Linked Insurance Plan


What is ULIP or Unit Linked Insurance Plan?

   ULIP or Unit Linked Insurance Plan is an investment plan which is the mix of insurance plan and investment plan. When the plan holder pays the fixed premium, a part of the payment goes to secure the life and rest of the amount is invested in equity stocks and/or debts.

   These plans are generally offered by insurance companies where unlike an insurance policy, they offer both investment and insurance schemes under a single plan. These plans have a lock-in period of 5 years. However, as offered by insurance companies, to avail the insurance benefits, investors may have to remain invested in the plan from 10 to 15 years.

Investment in ULIPs is eligible for tax benefit up to 1.5 Lakhs under section 80c of Income Tax Act.
Working of ULIP or Unit Linked Insurance Plan

When an investor invests in ULIP, the company providing the plan invests a part of the premium in equity shares and/or bonds and the rest of the balance is used to cover the insurance. This investment is done by the fund managers of the company which is providing the plan. Depending on the risk appetite of the investors, investment advisors advise investors a variety of ULIPs ranging among equity, balanced and hybrid plans.

Benefits of ULIP or Unit Linked Insurance Plan

Following are the benefits of ULIPs or Unit Linked Insurance Plans:-

  • Life Cover
  • Income Tax Benefits
  • Long-Term Financial Goals
  • The flexibility of a portfolio switch
  • Balanced Risk
ULIP or Unit Linked Insurance Plan and Mutual Funds

The differences between ULIPs and mutual funds are given below:-

  ULIPs Mutual Funds
Scheme Investment cum Insurance Scheme Only Investment Scheme
Redemption Redeemed after 5 years lock-in period can be redeemed at any time
Charges Mortality charge, premium allocation charges, fund management charge, administration charge

Entry Load: Not Applicable

Exit Load: 1%, if redeemed within 1 year

Portfolio Switching Portfolio switching is permitted

Not permitted, conditions apply

Top ULIPs or Unit Linked Insurance Plans in India

According to the policybazaar.com, these are the top performing ULIPs offering companies in India which give up to 21.2% return in 5 years on an investment of Rs 5,000 per month:-

  1. Bajaj Allianz
  2. HDFC Life
  3. Edelweiss Tokio
  4. Max Life Insurance
  5. ICICI Prudential Life Insurance


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Disclaimer: This post does not give any advice or recommendation. Mutual Fund investments are subject to market risk. Please read all the related documents carefully before investing. It is also advised to consult your financial advisor for necessary suggestions. 


Tags: #mutual funds #investments #ULIP #Tax Saving

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