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Written bySumit Narula
Published 23rd August 2024
Reviewed byPrateek Pandey
Last Modified 21st July 2026
Investment Expert
What Are the Benefits of ULIP?
One of the most highlighted features of Unit Linked Insurance Plans (ULIPs) is its dual benefits. It combines market-linked investments with life insurance. Which means you get double benefits of protection and fund growth within one product.
- Two-in-one advantage:Avail life insurance cover and investment growth all under one scheme.
- Choice of funds:Choose from equity, debt, or balanced funds based on your risk appetite.
- Switching of funds:Change between fund options without additional charges to optimise returns in volatile market conditions.
- Long-term wealth accumulation:Gathers wealth in the long term without diluting financial protection.
- Tax benefit:Contributes towards Section 80C (old tax regime) and thereby ULIPs are a cost-effective savings option.
- Customisation:Invest premiums based on investment strategy and individual financial goals.
- Transparent progress:Review fund performance from time to time and remain an informed decision-maker.
ULIPs Encourage Goal-Based Savings
ULIPs are designed to support goal-based financial planning. ULIPs enable policyholders to channel funds for the purpose of buying a house, education, or planning for retirement. By means of systematic premium payment and fund switches, ULIPs allow for a disciplined long-term wealth creation process.
ULIP calculator is one of the tools used by policyholders to estimate potential returns and track goal progress. By combining insurance protection with tailor-made investment schemes, ULIPs encourage saving habits while offering solutions to long-term financial needs.
1. Flexible investment options
ULIPs offer a whole host of high, medium and low-risk investment options via different fund available under the same plan. You can choose an appropriate plan according to your risk-taking appetite. ULIPs provide the flexibility to choose either the sum assured or the premium based on your needs. They also provide the flexibility of increasing your investment portfolio through top-ups to make the most of investment opportunities due to any change in the external environment or your own income flows.
2. Transparency
The charge structure, value of an investment and expected rate of returns, for the complete tenure of the policy are shared before you buy a product. It's always a good idea to understand the product you would be investing your hard-earned money into.
Similarly, the annual account statement & quarterly investment portfolio along with the daily NAV reporting will ensure that you are aware of the status of your investment portfolio at all times.
Similarly, the annual account statement & quarterly investment portfolio along with the daily NAV reporting will ensure that you are aware of the status of your investment portfolio at all times.
3. Liquidity when you need it
In case of any unforeseen future events, ULIPs also let you do a partial withdrawal; wherein after the first 5 years, you can withdraw funds from your Unit Linked Insurance Plans.
4. Disciplined and regular savings
ULIPs help you inculcate a regular saving habit, which goes a long way in building a corpus for future needs.
5. Tax benefits
The premiums paid towards the policy are exempt from tax under section 80C. of income tax Act, 1961.
6. Spread of risk
With ULIPs, you get the benefit of market-linked growth without actually participating in the stock market, not to mention the added benefit of life-cover.
ARN:-Sep/Bg/28D
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