Unit Linked Insurance Plan (ULIP)

A Unit Linked Insurance Plan (ULIP) is a financial product that combines life insurance protection with investment opportunities. Part of the premium paid is allocated to life insurance coverage, while the remainder is invested in equity, debt, or hybrid funds, depending on the policyholder’s preference. The investment component’s value fluctuates with market performance, providing potential growth alongside insurance security.

Example: An individual invests ₹50,000 per year in a ULIP. Of this, ₹10,000 goes toward life insurance coverage, while ₹40,000 is invested in equity and debt funds. Over time, the investment’s value may increase or decrease with market performance, while the life insurance component ensures financial protection for the policyholder’s beneficiaries.