Unit Linked Insurance Policies(ULIP)

• Sustainable to people prepared to undertake some investment risk
• Contain fewer guarantees
• They are much more flexible
• In a ULIP the insure has a variety of funds to choose from like equity funds, debt funds, balanced funds and money market funds etc for their investments.
•  ULIPs give the insured the option to participate in the growth of the capital markets

• On the death of the insured the sum indured or the market value of the investment (fund value), whichever is higher, is paid
• On maturity of the plan the fund value is payable
• Settlement option: instead of taking a lump sum amount, some plans provide the policyholder eith the option to receive the maturity benefit amount as a structured payout(periodic installments) over a period of time ( say, 5 years or any time up to 5 years) after maturity

In traditional Plan like Endowment, the insured decides the amount of Sum Assured to be purchased. Whereas in ULIP, the insured decided the amount of Premium ; Sum Assured is a multiple of the premium paid (ex: 10 times the annual premium)