Investment (ULIP) Life Insurance

What is ULIP (Unit Linked Insurance Plan)?

ULIP or Unit Linked Insurance Plan is a type of Insurance, which combines the benefits of protection and saving in a single plan. The major advantage that a ULIP has over the traditional wealth creation tools is the benefit of a Life Cover. As a result, your money can grow and at the same time, your loved one’s future is protected from life's unexpected turns.

How do ULIPs work?

A ULIP is both an insurance policy and an investment. The policy specifies a death benefit - the amount the nominee will be paid if the policyholder passes away during the term of the ULIP. In addition, if the policy holder survives the term of the ULIP, he/she can also get the maturity value of the ULIP. This will be the amount generated by the ULIP investments in equity and/or debt. The policyholder is typically allowed to choose ULIP funds and asset classes to generate these returns. This is the investment component of a ULIP.

Note that even if the value of the ULIP investments falls below the sum assured specified in the ULIP, the policy holder’s nominee(s) will be paid the death benefit specified.

01 Regular Savings
ULIPs inculcate the habit of regular and disciplined savings, which is the key to successful long-term financial planning. With regular premium payments, you can enjoy the benefits of wealth creation for your loved ones.
02 Protection
ULIPs provide the protective benefit of a Life Cover, which keeps your family secure in your absence.
03 Flexibility of Investment

You will have flexibility and control of your money through the following ways:
Fund Switch – An option to move your money between equity, balanced and debt funds
Premium Redirection – An option to invest your future premium in a different fund of your choice
Partial Withdrawal – An option that allows you to withdraw a part of your money
Top-up – An option to invest additional money to your existing savings

04 Tax Benefits
Investment in ULIPs is eligible for deduction from taxable income under Section 80C of the Income Tax Act, 1961 up to 1.5 lakh per annum. The maturity proceeds of the ULIP are also exempt from tax under Section 10(10D) of the Income Tax Act subject to conditions specified therein. If the ULIP investor dies during the term of the ULIP he/she will be entitled to the death benefit specified in the ULIP policy and the amount received on death is exempt from tax u/s 10(10D) of The Income Tax Act 1961. Switching between ULIP funds also does not attract any tax.
05 Potential for Growth
There is a potential of earning higher returns from the power of equity and debt funds. This will help you achieve your life-goals such as buying a new home, your dream car, funding your child’s higher education and much more.
06 Greater Rewards for Staying Invested
Your money grows further as the insurance company adds to your savings through bonuses/ additions and are available to you in ULIPs in different forms Such as, Loyalty Additions and Wealth Boosters.