Question 1

What is a ULIP?

Accepted Answer

A Unit Linked Insurance Plan (ULIP) invests premiums in market funds while providing life cover. Returns depend on fund performance; charges reduce net returns.

Question 2

What is the lock-in period for ULIPs?

Accepted Answer

ULIPs have a five-year lock-in. Surrender before lock-in may incur charges and tax implications. Partial withdrawals are allowed after lock-in per policy terms.

Question 3

How do ULIP charges work?

Accepted Answer

Common charges include premium allocation, fund management, policy administration, and mortality charges. IRDAI caps some charges — compare benefit illustrations.

Question 4

Are ULIP returns guaranteed?

Accepted Answer

No. Fund units move with equity or debt markets. Some plans offer guaranteed additions or wealth boosters — read the sales illustration carefully.

Question 5

Is ULIP better than term insurance plus mutual funds?

Accepted Answer

Many financial planners recommend separating protection (term insurance) and investments (mutual funds) for lower cost and flexibility. Compare total charges before choosing ULIPs.

ULIP Plans in India

ULIP plans

Frequently Asked Questions