Why Are ULIPs Called Flexible Investments?

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

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

Why Are ULIPs Called Flexible Investments?

Why Are ULIPs Called Flexible Investments?
  • 28th Mar 2022 |
  • 2,326

The necessity to invest in beneficial monetary instruments is at the forefront of the change due to the ever-increasing financial requirements caused by rising inflation and a fast-changing global economic landscape.

In recent years, investing has gained a new level of popularity; the notion of investment is no longer limited to real estate but has expanded to include financial investment tools with the potential for high-profit returns.

As a result, you must invest in a financial instrument that allows you to shift your funds with simplicity while also providing excellent returns. ULIP insurance can help in this situation.

What is ULIP policy?

A ULIP is not an insurance plan or an investment plan; rather, it is a hybrid of the two. ULIP plan is one of the newest financial instruments available to investors. Unit-Linked Insurance Plans are insurance plans that provide insurance coverage while also producing profits through investment sources. In a manner similar to mutual funds, the insurance provider launches a new plan and encourages investors to participate. Thus, ULIP plans invest in stocks, commodities, and debt instruments, and ULIP fund performance depends on the capital market momentum.

Features that Make ULIP a Flexible Investment Option

  • Fund Switching Flexibility

Unit-linked insurance policies include the ability to move funds, giving the policyholder many options. As an investor, you have the option of investing in debt or equity funds or in a portfolio that includes both equity and debt funds. In addition, you can switch your assets from one fund to another under this policy, and ULIP interest rate depends on the market condition. Furthermore, these swaps may be for full or partial units, making them more relevant. During the policy years, you as the investor can swap between fund alternatives at any moment. The equity or debt exposure can range from zero to one hundred percent, with and without varying debt, cash, and securities combinations.

  • Life Cover Choice

You may determine the amount of insurance coverage you desire in a ULIP investment. The minimum Life Cover granted by most ULIPs is ten times your yearly premium sum. However, according to the plan and the insurance provider, you may be able to choose a Life Cover value of up to 40 times your yearly premium or more.

  • Partial Withdrawal Provision

Before the policy term concludes, you, as a policyholder, have the option of withdrawing a portion of your own earned fund values. This option is quite valuable since it may assist unexpected cover costs. However, it’s worth noting that the entire sum isn’t accessible for withdrawal, and this function is only available after the stipulated five-year lock-in time has passed.

  • Premium Payment Structure

The premium payment term, or PPT, is the period during which you must pay your premiums. ULIPs provide you with the option of paying your premium in a variety of ways. For example, you have the option of paying the premium monthly, quarterly, annually, or as a one-time payment.

  • ULIP Tax Benefits and Claims

Why are ULIPs called flexible investments?

Three key benefits come with the ULIP plan. First, under Section 80C and Section 10 (10D) of the Income Tax Act, 1961, premium payments, maturity benefits, and death benefits are all tax-free up to a certain sum.

Furthermore, most investments, notably death benefits, provide lump-sum payments. A ULIP, on the other hand, allows you to get your benefits in one lump amount or installments.

To summarise, the best ULIP plan to invest in is one that is aligned with your personal and financial goals for the future, not the one that gives the most flexibility or return. Therefore, before purchasing a ULIP policy, it is recommended that you perform comprehensive research and market analysis.

Kotak e-Invest

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


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

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


Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

How can NPS help you save tax?

What is the Minimum Lock-in Period for ULIP?

Retirement: A New Start to Life!

Invest for your second innings with a guaranteed savings plan

What are the Uses of ULIP?

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

Saving for approaching retirement with retirement insurance

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

What are the things to consider before buying ULIPs?

Benefits of Early Retirement Plans

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

5 Common ULIP Myths That You Should Stop Believing

Meaning of Sum Assured in a ULIP

Why You Should Invest In An Annuity Plan?

How Does Pension Plans in India Works?

How Does NPS Work?

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

Top 4 Myths About ULIP Investments You Should Know

Which Pension Plan Suits You best?

What is the difference between Life Insurance and ULIP?

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

Top 6 Flexible Benefits That ULIPs Offer

Different Types of Retirement Schemes

8 Charges in ULIP That You Must Know

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

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

Save Early to Keep Living Your Dreams Post Retirement

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

यूलिप के फायदे (Benefits of ULIP in Hindi)

A Quick Guide to Retirement Plans

What are the Rules for Exit From NPS?

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

Inflation: A Key Factor to Consider into Retirement Planning

5 Steps to Gift a Smart Retirement Plan to Your Parents

What are ULIPs and their Types?

What is a Retirement Plan - What are its Features?

5 Notable Investment Options for Retirees

Different Types of ULIP Investments in India

Is the ULIP Policy Surrender Value Taxble?

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

Top Investment Options for Retirement Planning

Un-Retirement - Are You Ready For It?

What are the Instruments Available for Building a Retirement Corpus?

What Are Retirement Pension Plans?

ULIP Plan or Traditional Insurance Plans - Which is better?

What is an Annuity Plan and How Does Annuity Plan Works | Kotak Life

Understanding Annuity Plans

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

Is ULIP A Good Investment Option?

ELSS vs ULIP: Which is a Better Investment?

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

यूलिप के 8 शुल्क

How Does ULIP Work in India?

7 Secrets that can Make Your Post-Retirement Phase Prosperous

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

How To Invest Money In ULIP?

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

Top 4 Mistakes To Avoid While Planning For Your Retirement

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

Can I Surrender My ULIP Policy after 2 Years?

5 Reasons to Buy ULIP for a Secured Financial Future

Tips to invest your voluntary retirement scheme money

How Has NPS Performed in Comparison with Other Instruments?

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

Is ULIP a Good Option for People Above 60?

The Significance of Number 8,000 in Retirement Planning

Retirement Planning Guide for Working Men and Women

Retirement Planning for Millennials

Can NRIs Invest in ULIP Plans Offered in India?

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

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

Top 6 Reasons Why You Should Get A Pension Plan

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

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

Types of Pension Plans for Your Retirement

Benefits of Early Retirement Planning in India

How To Choose The Right Pension Plan?

What Happens to ULIP Premiums Paid if the Market Crashes?

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

Pros and Cons of Retirement Annuities

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

What Are Mortality Charges In ULIP?

How To Make Most of Your Money After Retirement?

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

What are the Benefits of ULIP - Explained

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

Terminologies You Should Understand About Retirement Plans

What are the Charges Levied on ULIP?

What is ULIP and Its Benefits?

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

Retirement planning with a systematic life insurance plan

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

Give Your Retirement Savings A Booster-Shot with Annuities

NPS for Housewife

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

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

Is ULIP a Complex Financial Product?

Are Annuities Great For Early Retirement?

Which Is Better: ULIP or SIP?

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

Why are ULIPs One of the Best Tax Saving Instruments?

A Beginner's Guide to Understanding 401k Retirement Plan

What is Fund Value in ULIP?

How Do Annuity Options Work In NPS

What tax benefits are there on saving for retirement?

How has ULIP Grown Over the Last 3 years?

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

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

At What Age Should You Start Your Retirement Planning?

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

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

Ten Signs That You're Ready to Retire

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

How is ULIP NAV calculated? How is the return calculated in ULIP?

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

Benefits Of Retirement & How Investments Can Help You Enjoy Them

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

How To Keep Your Retirement Accounts from Being Hacked?

Types of Retirement Plans

How Safe is it to Invest in ULIP plans?

What is Partial Withdrawal in ULIPs?

What Are Superannuation Benefits?

What are the Advantages and Disadvantages of ULIP?

Why Should You Invest in NPS?

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

How Much Corpus Does One Need for Retirement?

Which are the Best ULIP Plans in India for Children?

Do ULIPs Give Good Returns On Investments?

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

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

Managing Your Retirement Income with an insured retirement plan

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

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

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

Demystifying the Retirement Planning Process

Is It Worth Buying ULIP Plans For 10 Years?

Why Should I Invest in ULIP?

Importance of financial Planning for Retirement

Advantages of Pension Schemes and Retirement Plans

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

How to Choose the Best ULIP Plans to Invest in 2022?

Do Pension Plans Allow any Death Benefits?

Know Why You Should Stay Invested in Your ULIP Plan

Is ULIP Better Than FD?

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

What are the Differences Between ELSS ULIP and Mutual Funds?

How to Win at Retirement Savings?

Calculating a Retirement Corpus that can Support Your Lifestyle

What is Lock-In Period in ULIPs?

How Can I Achieve My Wealth Goal with ULIP Investment?

FAQs on Taxation of ULIPs

Retirement Planning at 50? You Are Still Good to Go

Importance of Retirement Planning

How should one decide on fund allocation within NPS?

Why ULIP Should Be a Part of Your Investment Portfolio?

Long Term Investment Guide for Your Retirement