(Last Updated: June 20, 2019)
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What is ULIP? Full form, ULIP Meaning, Features & Benefits



  • ULIP stands for Unit-Linked Insurance Plan.

    ULIP Meaning:
    In simple words, ULIP is a combination of insurance and investment. The insurer puts your money partly towards life insurance and partly invests it in a fund that can be debt or equity or both. There are fund managers to manage your investments.
    ULIP or Unit-Linked Insurance Plan is primarily a long term investment tool for meeting your long term financial goals. You can switch and adjust your portfolio between debt and equity as per your risk horizon.
    ULIP or Unit-Linked Insurance Plan Features & Benefits:

    • You get a life insurance cover that acts as a security for your family.
    • Premium paid for ULIP qualifies for tax deduction under Section 80C.
    • The amount received on maturity is also exempt Under Section 10(10D).
    • You can switch from equity to debt as per your risk appetite.
    • ULIPs have a lock-in period of 5 years and generally suits long term investors.
      Hence, ULIP is another addition to the list of retirement planning and wealth creation options in India.


  • @ishu Is it worth investing in ULIP plans? I mean there are mutual fund and direct stock investing options as well. So, why one should prefer investing in ULIPs? Any feedback on it.



  • Insurance and investments are 2 boats, better not to try to sail in them together.



  • @prateek Rightly said! But, to some extent. Insurance should never be mixed with investment. However, one must not ignore the importance of health and term insurance as well. Both, insurance & investment have their own special place in our financial life and none can be ignored.

    The motive to have insurance should be to safeguard you and your family by taking an adequate risk cover. Whereas your investment strategies must be focused on generating good returns & growing your money in the long run. What do you think? Did I point out correctly? Any add-ons you wish to make to it.



  • @prateek Well said bro 🙂 Insurance & investment are 2 boats. But, why not sail together, I mean both things are important. Clarify a bit on it.



  • I am looking to invest in ULIP for 80c purpose. I have very less time remaining. An agent told me a few months back to invest in HDFC Click to invest ULIP. Is it a good investment ?

    Also, I just hope that I am not investing in a hurry. I want to know the pros and cons if any one can help.



  • @prateek @deepakadvisor I am not sure but I think ULIP is not the best option. I know agents just wish to sell their products. I am also confused like you. I have to complete my 80C investments to claim tax benefit.
    Although, I have put some money in PPF but that has a long lock-in period. So, I am not preferring maximum there since I might need it soon. Just few days left to complete investments for previous year. It would be great if someone here can suggest good alternatives.



  • Roger-Philip said in What is ULIP? Full form, ULIP Meaning, Features & Benefits:

    I am looking to invest in ULIP for 80c purpose. I have very less time remaining. An agent told me a few months back to invest in HDFC Click to invest ULIP. Is it a good investment ?

    Don't trust the agents easily. Their main motive is to sell their products and bagged attraction commissions. Usually hide the cons.

    Honestly, I feel ULIP is not a good investment. Three biggest and painful cons of investing in ulips that weighted the good ones are:

    • Highest charges
    • limited in insurance
    • hidden details of investment

    You can still complete your 80c by investing in mutual fund and term insurance separately and 80d to claim double tax benefit by apply in health insurance.



  • Yes, Someone told me that its a not a good idea to invest in ULIP and suggested me ELSS to invest for 80C, I will probably go for that. Thanks for the help.



  • @Tarun I too believe there are other best investment alternatives rather than putting money in ULIP. These last minute investments for claiming deductions are usually made in a hurry. So, one needs to be very careful while investing in any financial products.

    People get confused and just want to complete the 80C investment. That's it! This hurry leads to money being stuck up in not so good plans. Therefore, one needs to be cautious and not fall trap to it. We need to focus on our financial goals and then choose the best investment plan.



  • Sanjay said in What is ULIP? Full form, ULIP Meaning, Features & Benefits:

    @Tarun I too believe there are other best investment alternatives rather than putting money in ULIP. These last minute investments for claiming deductions are usually made in a hurry. So, one needs to be very careful while investing in any financial products.

    People get confused and just want to complete the 80C investment. That's it! This hurry leads to money being stuck up in not so good plans. Therefore, one needs to be cautious and not fall trap to it. We need to focus on our financial goals and then choose the best investment plan.

    Well put Sanjay couldn't agree more. It's high time to be aware of investments, rather than depend on other's advices.

    In this generation, common man or layman will be able to understand the basic stuffs easily, simply by self-research. No doubt we need expert guidance, but guidance should be taken for confirmation with research rather than depending on their decisions. That's the weakness most people have. Yeah, one needs to be cautious and not fall trap to it. ✌



  • @Tarun So true! As a common man one needs to be cautious and aware of our investments. There are so many investment options these days. ULIP used to be popular many years back. But, now it has lost traction.

    People are more inclined towards modern ways of investing like mutual funds. I also agree that ULIP is not the best investment alternative when you have so many better options available.



  • Unit Linked Insurance Plans, better known as ULIPs, are a product offering from insurance companies that provide a ‘Combo’ of investment and insurance. The underlying investment funds offered by ULIPs are similar to that of mutual funds.

    ULIPs are a combination of investments and insurance. Every ULIP policy has a minimum premium amount and a premium payment term. The sum assured is a multiple of the premium amount.

    You may choose to make a Single Payment or Regular Payment over the policy term. The policy term ranges from a minimum period of 5 years to as much as 20 years.

    Every premium you pay, part of it is deducted towards the insurance cover, which is the mortality cost.

    Apart from this, other charges in the form of Administration Charges and Premium Allocation Charges are deducted. The resultant premium is then invested in the funds selected. Therefore, ULIP has its of underlying funds that have a predefined investment strategy. You may invest in a single fund or divide your investment across multiple funds based on your risk profile.



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