Top 4 Myths About ULIP Investments You Should Know

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Kotak e-Invest

Top 4 Myths About ULIP Investments You Should Know

Like any investment schemes, even ULIPs have myths associated with them. Here are 4 ULIP myths you should know for better investment opportunity.

  • Apr 14, 2022

One of the facts about investment is that it comes with risks involved because all of your focus is on saving money to secure your future at some point in life. Also, there are multiple investment options available for all investors today. These options are designed so that it caters to the investment and financial needs of all.

However, there is considerable misinformation related to these financial investment options. And ULIP, a popular investment option today, is also not spared of such misinformation. This non-factual misinformation that is not based on fact and reality about ULIP as a financial tool and its functionality are called ULIP Myth.

If you are willing to invest a huge sum at once, you can invest in Debt funds, while if you want to invest small amounts systematically over some time, you can opt for SIPs & ULIPs. But, as normal human behavior, once you have a good sum invested, you start worrying about it. This is where myths about investment tools come into play and haunt you.

This article will discuss some of the ULIP myths and bust them with the facts around them.

Top 4 ULIP Myths to be aware of

1. ULIPs are High-Risk Investment Plans.

This one is among the most common ULIP Myths. Many investors believe that investing in ULIP is a high-risk investment. Those who believe in this are less informed about ULIP’s policy guidelines and fund investment options.

ULIP is a highly diverse investment option that allows investors to invest according to their financial goals and risk-taking capabilities. ULIPs allow the investor to invest in various funds and at the same time also allow the ULIP policyholder to switch between the funds as per their requirement.

Top 4 Myths About ULIP Investments You Should Know

2. ULIPs are costly.

There is a ULIP myth that they are costly, and an investor or ULIP policyholder has to pay various charges while opting for ULIP.

This is the most inaccurate piece of information about ULIPs. ULIP policyholders are made well aware of the levied charges as per the policy guideline. Also, the charges levied on ULIPs are very transparent and upfront to the investors. Moreover, compared to other investment options, charges on ULIPs are comparably lesser.

3. ULIPs don’t allow liquidity

Contrary to what investors believe, ULIPs are one of the best investment options if you are looking for a modern investment option that is both long term, provides security, and allows you to stay in sync with the market growth by allowing you to invest in market funds.

In addition to this, ULIPs allow partial withdrawal. Meaning, a ULIP policyholder can withdraw a partial amount from their investment once the lock-in period of the ULIP policy is over. You must also read about ULIP policy surrender options, but it is highly advised to not opt for surrender before the lock-in period is over, as it can incur great losses.

4. ULIPs provide low returns.

The ULIP policies are one of the most modern investment options. If you check an average return on ULIPs every five years (lock-in period), you will note a satisfactory trend, and the trend gets better as you move towards long-term investment.

The more popular a plan becomes, the more are the chances of misinformation spreading. Thus it is highly advised that as an investor, you must always carefully read the policy documents and clarify even the smallest details and confusion with your insurance/investment agent. The right information is the key to the best investment.

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

Kotak e-Invest

Download Brochure


  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521


- A Consumer Education Initiative series by Kotak Life

Similar Articles

What is Premium Redirection in ULIPs Plans | ULIP Insurance Plans | Kotak Life Insurance

ULIP Tax Benefits: यहां निवेश करने पर मिलते हैं 5 बड़े फायदे

Is ULIP a Good Option for People Above 60?

What is the Difference Between EPF, VPF, and PPF? What are Their Tax Benefits?

Different Types of Retirement Schemes

Top 6 Reasons Why You Should Get A Pension Plan

How Quickly is Fund Switch Effected in ULIPs? Is it Done the Same Day or After a Particular Number of Days?

Is It Worth Buying ULIP Plans For 10 Years?

Worried About Running Out of Money in Retirement? 4 Tips to Avoid This Crisis

5 Common ULIP Myths That You Should Stop Believing

5 Steps to Gift a Smart Retirement Plan to Your Parents

7 Secrets that can Make Your Post-Retirement Phase Prosperous

How Can ULIPs Help You Plan for Your Child's Future?

What Happens If I Stop Paying My ULIP Policy Premium After Paying the First Premium? Will I Still Get The Return?

Types of Retirement Plans

What are the Charges Levied on ULIP?

At What Age Should You Start Your Retirement Planning?

Why Should Retirement Planning Be on Top of Your Priority List?

Retirement Planning for Millennials

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

How To Keep Your Retirement Accounts from Being Hacked?

Inflation: A Key Factor to Consider into Retirement Planning

What are the Chances of Losing all my Money in ULIP and How Much Return Should I Expect?

What are the Instruments Available for Building a Retirement Corpus?

How should one decide on fund allocation within NPS?

Importance of financial Planning for Retirement

How Can I Achieve My Wealth Goal with ULIP Investment?

What is ULIP and Its Benefits?

Can I Surrender My ULIP Policy after 2 Years?

How To Choose The Right Pension Plan?

A Beginner's Guide to Understanding 401k Retirement Plan

Saving for approaching retirement with retirement insurance

10 Steps to Figure Out How Much Money You Will Need For Your Post Retirement Plans

Pros and Cons of Retirement Annuities

ULIPs or Pension Plans – Which is a Better Retirement Plan?

Top 6 Flexible Benefits That ULIPs Offer

Understanding Annuity Plans

How Has NPS Performed in Comparison with Other Instruments?

How Does Pension Plans in India Works?

Benefits of Early Retirement Plans

Terminologies You Should Understand About Retirement Plans

What are the Uses of ULIP?

What are ULIPs and their Types?

Is it possible to live a financially independent life, even after you retire?

Is it Suggestible to Take a ULIP Plan Linked with a Term Plan?

Types of Pension Plans for Your Retirement

ULIP: Can You Surrender ULIPs or Withdraw Money from It?

Un-Retirement - Are You Ready For It?

What is the difference between Life Insurance and ULIP?

How to Win at Retirement Savings?

Calculating a Retirement Corpus that can Support Your Lifestyle

Top Investment Options for Retirement Planning

Who Gets the Benefit After the Maturity of ULIP: The Proposer or The Life Insured?

What Are Retirement Pension Plans?

What is a Defined Benefit Plan and How it Works?

Do ULIPs Give Good Returns On Investments?

Is ULIP a Complex Financial Product?

How Does ULIP Work in India?

The Significance of Number 8,000 in Retirement Planning

How To Make Most of Your Money After Retirement?

यूलिप के 8 शुल्क

Advantages of Pension Schemes and Retirement Plans

Is ULIP Better Than FD?

Which Pension Plan Suits You best?

ULIP Plan or Traditional Insurance Plans - Which is better?

Give Your Retirement Savings A Booster-Shot with Annuities

What is the Minimum Lock-in Period for ULIP?

What are the Rules for Exit From NPS?

Are You Planning an Early Retirement? Here's Why Buying Annuity Plan Will Make Sense

What are the Maturity Benefits in a ULIP Plan: Fund Value Sum Assured or Only Fund Value?

Ten Signs That You're Ready to Retire

Is it Advisable to Withdraw the ULIP Insurance Policy After 5 Years?

Retirement Planning Guide for Working Men and Women

Meaning of Sum Assured in a ULIP

Is the ULIP Policy Surrender Value Taxable?

Know Why You Should Stay Invested in Your ULIP Plan

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

Can NRIs Invest in ULIP Plans Offered in India?

What are the Differences Between ELSS ULIP and Mutual Funds?

यूलिप के फायदे (Benefits of ULIP in Hindi)

How Do Annuity Options Work In NPS

Why ULIP Should Be a Part of Your Investment Portfolio?

Why Should You start Retirement Planning as soon as you start a job?

Tips to invest your voluntary retirement scheme money

What is the Estimated Return Percentage on ULIP? Do Investors Get Compound Interest?

How To Calculate The Present Value And Future Value Of Annuities?

What is Partial Withdrawal in ULIPs?

How Safe is it to Invest in ULIP plans?

5 Reasons to Buy ULIP for a Secured Financial Future

How Does NPS Work?

Single Premium ULIP or a PPF - Which One is Better?

How can NPS help you save tax?

What are the minimum and maximum investment in ULIP? Would the Whole Amount Insured in The ULIP Insurance be Invested in the Market?

What Are Superannuation Benefits?

5 Reasons Why ULIP Plans are One of The Best Retirement Planning Instruments

6 Signs That You Are Not Financially Ready For An Early Retirement

Why Should You Invest in NPS?

How to Build a Tax-Free Pension Income for Retirement?

Top 4 Mistakes To Avoid While Planning For Your Retirement

5 Retirement Planning Tips for a Financially Controlled Post-Employment Life

Retirement and Pension Plans in India- What are Your Options?

Types of Annuity Plan | Annuity Definition - Meaning & Key Benefits

What are the things to consider before buying ULIPs?

What Are Mortality Charges In ULIP?

NPS for Housewife

Do Pension Plans Allow any Death Benefits?

Why You Should Invest In An Annuity Plan?

Invest for your second innings with a guaranteed savings plan

FAQs on Taxation of ULIPs

What Happens to ULIP Premiums Paid if the Market Crashes?

Are Annuities Great For Early Retirement?

What are the 4 Financial Phases of Retirement? How to Budget For Each One?

What is NAV in ULIP, and How is it calculated?

Getting Close to Retirement? Six Key Retirement Planning Tips That Can Help You Retire

Does Having Both ULIP Plan and Other Health Insurance Plan Make Sense?

A Quick Guide to Retirement Plans

What are the Benefits of ULIP - Explained

What tax benefits are there on saving for retirement?

What is Lock-In Period in ULIPs?

Different Types of ULIP Investments in India

Benefits of Early Retirement Planning in India

Retirement Planning at 50? You Are Still Good to Go

What is an Annuity Plan, and How Does Annuity Plan Work?

Looking for Ways to Earn Lifetime Income in Retirement? Here Are 6 of the Top Options

Annuity Plan | How to Choose the Right Annuity Plan | Kotak Life

What are the Advantages and Disadvantages of ULIP?

Retirement Planning - How To Calculate Your Retirement Premium in India?

10 Steps to Figure Out How Much Money You Will Need After You Retire

Long Term Investment Guide for Your Retirement

Is ULIP A Good Investment Option?

ELSS vs ULIP: Which is a Better Investment?

Retirement planning with a systematic life insurance plan

Which Is Better: ULIP or SIP?

What is a Retirement Plan - What are its Features?

Benefits Of Retirement & How Investments Can Help You Enjoy Them

8 Charges in ULIP That You Must Know

What is the Death Claim Payable in the Case of ULIP?

Here's What Retirement Would Look Like 30 Years From Now

5 Notable Investment Options for Retirees

Retirement: A New Start to Life!

Importance of Retirement Planning

Demystifying the Retirement Planning Process

Difference Between Unit-Linked Insurance Plans and Non-Linked Plans

What is Fund Value in ULIP?

What To Do With Your Retirement Accounts During An Employment Lapse?

How Much Corpus Does One Need for Retirement?

How has ULIP Grown Over the Last 3 years?

Retirement Planning Guide: These 5 Steps Will Help You Towards a Safe, Secure and Fun Retirement

Save Early to Keep Living Your Dreams Post Retirement