Unit Linked Insurance Plans (ULIPs) are a popular investment option that combines life insurance and investment in a single product. ULIPs offer investors the flexibility to choose from a range of ULIP Funds based on their investment objectives and risk profile. These funds can be broadly classified into equity, debt, and balanced funds. Each of these funds has its unique investment plan and risk-return profile, allowing investors to diversify their portfolios and manage risk effectively.
With ULIPs, you can have insurance coverage and the added benefit of saving for objectives throughout your life. The ULIP calculator is a simple tool that you can use to predict the return you might get at maturity by entering a few details.
ULIPs are transparent life insurance plans that allow you to modify the selected investment funds in response to market circumstances.
| Fund Name | Fund Objective | Risk Rating |
| Growth Super Fund | Focus is on equity markets, with 70% of the portfolio always invested in stocks.
The remaining 30% is put into debt instruments, including corporate, government, and money market papers. |
High |
| Balanced Fund | Investing mostly in debt instruments, such as government securities, corporate bonds, and money market notes issued by the government of India or state governments, as well as, to a lesser extent, corporate bonds and money market instruments.
Equity exposure ranges from 10% to 40%. |
Medium |
| Growth Fund | The fund’s equity investment ranges from 20% to 70%.
The remaining 30% to 80% is invested in debt securities, including the money market and corporate papers. |
High |
| Conservative Fund | Investing mostly in debt instruments, such as government securities, corporate bonds, and money market notes issued by the government of India or state governments, as well as, to a lesser extent, corporate bonds and money market instruments.
The maximum equity exposure is 15%. |
Low |
| Secure Fund | invests in debt instruments such as corporate bonds, money market notes, and government securities issued by the Indian government, state governments, corporations, and banks.
The fund also makes money market investments in accordance with IRDAI guidelines. Equity investments are not made. |
Low |
Redirection and Switching
Numerous plan alternatives are available to control the turbulent market, including switching and redirection. These are the two methods by which you can control their returns during a choppy market.
Re-direction is the allocation of future premiums, in full or in part, to fund(s) accessible, whereas switching is the transfer of your corpus from the fund(s) to other available funds.
As your life evolves, you choose your fund depending on your shifting risk tolerance and financial objectives. These practical choices will shield you from market swings by balancing the investing portfolio between debt and equity.
Unlike typical insurance policies, unit-linked insurance products (ULIPs) are influenced by risk factors. The Unit Linked Life Insurance Policies’ premiums are subject to the investment risks associated with the capital markets. The units’ NAVs may increase or decrease depending on the fund’s performance and other capital market factors. The insured is ultimately responsible for his or her choices. Please be aware of the dangers and associated costs from your insurance agent, the intermediary, or the insurance policy paperwork. In a ULIP, the policyholder assumes the risk associated with the investment portfolio. During the first five years of the contract, there is no liquidity provided by the associated insurance products. Till the conclusion of the fifth year, the policyholder will not be allowed to fully or partially surrender/withdraw the money invested in connected insurance products.
Unit Linked Insurance Plans (ULIPs) offer a variety of ULIP Funds to cater to the diverse investment needs and risk appetites of investors. These funds can be broadly classified into equity, debt, and balanced funds. Equity funds invest primarily in stocks and are suitable for investors with a higher risk appetite and a long-term investment horizon. Debt funds invest primarily in fixed-income securities such as bonds and are suitable for investors who prefer lower-risk investments with a steady income stream. Balanced funds invest in equities and fixed-income securities, balancing risk and return.
Investors in ULIPs can choose the fund that best suits their investment objectives, financial goals, and risk profile. The fund selection should be based on the investor’s age, income, financial obligations, and investment horizon.
Overall, the type of funds in ULIPs provides investors various investment options to help them achieve their financial objectives while managing risk. As with any investment, it is important to carefully consider one’s goals, risk tolerance, and investment horizon before choosing a ULIP fund.
To calculate your expected sum assured, utilise the ULIP calculator.
