Is ULIP a Complex Financial Product?

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

Is ULIP a Complex Financial Product?

No, ULIP plans are well-known majorly due to good investment returns, ULIP tax benefits, and ability to manage portfolios, among other advantages of ULIPs. ULIP is a good investment plan.

  • Mar 16, 2022

The straightforward answer to this question is No! Unit Linked Insurance Plan or ULIP is not a complex financial product. It is only different from the traditional insurance products, which makes it unique for policy buyers to understand. ULIP is a financial product that provides risk coverage (Insurance) along with investment opportunities in market products like Bonds, Debts, Equities, Mutual Funds, etc. to maximize an individual’s financial growth. ULIP plans are well-known majorly due to good investment returns, ULIP tax benefits, and ability to manage portfolios, among other advantages of ULIPs.

ULIP = Insurance + Market Investments

ULIP seems to be a tricky financial product, because through a ULIP policy an individual gets access to both life insurance and market products like mutual funds, debentures, equities, etc., which in themselves are complex financial products. It has been noted that very often ULIPs are compared with other financial products like mutual funds and simple term insurance plans, which is wrong.

ULIP being a combination of different financial insurance and investment products needs a deep understanding of all such financial products and policy matters. In addition to this, while investing in ULIP policy you also need to emphasize on your financial needs and goals and pick a policy accordingly.

So, it is suggested that before making a decision to invest in a ULIP policy, one should consult an insurance agent and discuss in detail all the important details and policies of ULIPs offered by different companies, and then decide which fits best to your needs.

Important Topics of ULIP Document You Should Read Carefully

As you must have seen in many advertisements and in general also, it is advised to go through the documents of any investment plan as many of them are subject to market risk and have varied policies that you as an investor should know. So here are some important parts of the ULIP policy document that one should carefully read:

1. Administration charges of the policy

2. Allocation charges

3. Redemption charges

4. Policy switching charges

5. Policy returns guidelines

In addition to this, financial experts and advisors highly recommend that you take time and go through all the policy-related documents thoroughly before making an investment move.

ULIP vs Mutual Funds (MFs)

Very often ULIPs are compared with mutual funds (MFs), in day-to-day life and due to lack of financial awareness. Let’s understand in brief, how ULIPs are different from MFs?

The major point that differentiates ULIPs from Mutual Funds is that the MFs don’t offer insurance cover along with investment opportunities. Also, not all mutual funds give you tax benefits, whereas most ULIPs serve as a one-time investment plan with tax benefits.

ULIP Tax Benefits

Compared to other investments, ULIP taxation benefits are a wise consideration. The premiums paid on ULIP policies are eligible under 80C deduction for a sum of up to ₹1.5 Lakhs in one financial year. In addition to this, another ULIP tax benefit is that the amount you receive on maturity of the ULIP plan is exempted from tax under section 10 (10D).

Advantages of ULIPs

  • Safety of insurance
  • Benefits of Return on investment in accordance to market growth
  • Access to personal portfolio for tracking growth
  • Ability to manage investments as desired, etc.

Thus, in conclusion, if you’re looking for one-time investment plans with tax benefits, ULIP is your investment destination. ULIP taxation benefits along with other advantages make it one of the best investment options for you.

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

Can NRIs Invest in ULIP Plans Offered in India?

Do ULIPs Give Good Returns On Investments?

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

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

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

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

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

Pros and Cons of Retirement Annuities

Benefits of Early Retirement Planning in India

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

How To Choose The Right Pension Plan?

How Can I Achieve My Wealth Goal with ULIP Investment?

How Much Corpus Does One Need for Retirement?

How Does Pension Plans in India Works?

What Are Superannuation Benefits?

What is the Minimum Lock-in Period for ULIP?

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

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

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

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

The Significance of Number 8,000 in Retirement Planning

Retirement planning with a systematic life insurance plan

A Quick Guide to Retirement Plans

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

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

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

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

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

Save Early to Keep Living Your Dreams Post Retirement

Why Should You Invest in NPS?

Different Types of ULIP Investments in India

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

Top 4 Myths About ULIP Investments You Should Know

What are the Differences Between ELSS ULIP and Mutual Funds?

Is ULIP Better Than FD?

Which Pension Plan Suits You best?

ELSS vs ULIP: Which is a Better Investment?

Tips to invest your voluntary retirement scheme money

What are the Advantages and Disadvantages of ULIP?

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

Why You Should Invest In An Annuity Plan?

Benefits of Early Retirement Plans

Advantages of Pension Schemes and Retirement Plans

Top 6 Flexible Benefits That ULIPs Offer

FAQs on Taxation of ULIPs

What are the Instruments Available for Building a Retirement Corpus?

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

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

How Do Annuity Options Work In NPS

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

Un-Retirement - Are You Ready For It?

What is Lock-In Period in ULIPs?

Demystifying the Retirement Planning Process

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

Which Is Better: ULIP or SIP?

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

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

5 Steps to Gift a Smart Retirement Plan to Your Parents

A Beginner's Guide to Understanding 401k Retirement Plan

How Does ULIP Work in India?

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

Is ULIP A Good Investment Option?

Different Types of Retirement Schemes

NPS for Housewife

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

Top Investment Options for Retirement Planning

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

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

What Happens to ULIP Premiums Paid if the Market Crashes?

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

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

What is a Defined Benefit Plan and How it Works?

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

5 Common ULIP Myths That You Should Stop Believing

Do Pension Plans Allow any Death Benefits?

How should one decide on fund allocation within NPS?

How To Make Most of Your Money After Retirement?

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

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

Long Term Investment Guide for Your Retirement

यूलिप के 8 शुल्क

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

What are the Benefits of ULIP - Explained

Understanding Annuity Plans

Are Annuities Great For Early Retirement?

What are the Uses of ULIP?

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

What are the things to consider before buying ULIPs?

Give Your Retirement Savings A Booster-Shot with Annuities

What are ULIPs and their Types?

Importance of Retirement Planning

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

7 Secrets that can Make Your Post-Retirement Phase Prosperous

How Has NPS Performed in Comparison with Other Instruments?

What are the Charges Levied on ULIP?

Retirement Planning at 50? You Are Still Good to Go

Calculating a Retirement Corpus that can Support Your Lifestyle

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

How Safe is it to Invest in ULIP plans?

Why ULIP Should Be a Part of Your Investment Portfolio?

How can NPS help you save tax?

ULIP Plan or Traditional Insurance Plans - Which is better?

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

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

Invest for your second innings with a guaranteed savings plan

What Are Mortality Charges In ULIP?

Importance of financial Planning for Retirement

What is ULIP and Its Benefits?

यूलिप के फायदे (Benefits of ULIP in Hindi)

Retirement Planning for Millennials

5 Notable Investment Options for Retirees

Types of Pension Plans for Your Retirement

Retirement: A New Start to Life!

Know Why You Should Stay Invested in Your ULIP Plan

What is Partial Withdrawal in ULIPs?

Is ULIP a Good Option for People Above 60?

Top 6 Reasons Why You Should Get A Pension Plan

Meaning of Sum Assured in a ULIP

How has ULIP Grown Over the Last 3 years?

8 Charges in ULIP That You Must Know

5 Reasons to Buy ULIP for a Secured Financial Future

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

What is a Retirement Plan - What are its Features?

What are the Rules for Exit From NPS?

Is It Worth Buying ULIP Plans For 10 Years?

Types of Retirement Plans

Ten Signs That You're Ready to Retire

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

Saving for approaching retirement with retirement insurance

Benefits Of Retirement & How Investments Can Help You Enjoy Them

At What Age Should You Start Your Retirement Planning?

Can I Surrender My ULIP Policy after 2 Years?

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

How To Keep Your Retirement Accounts from Being Hacked?

Terminologies You Should Understand About Retirement Plans

Is the ULIP Policy Surrender Value Taxable?

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

How to Win at Retirement Savings?

How Does NPS Work?

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

Retirement Planning Guide for Working Men and Women

What Are Retirement Pension Plans?

What is Fund Value in ULIP?

What is the difference between Life Insurance and ULIP?

Top 4 Mistakes To Avoid While Planning For Your Retirement

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

Inflation: A Key Factor to Consider into Retirement Planning

What tax benefits are there on saving for retirement?