Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak Guaranteed Fortune Builder

A plan that offers guaranteed income for your future goals. Know more

Kotak e-Term

Protect your family's financial future. 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 life cover. Know more

Kotak e-Invest

Insurance and Investment in one plan. Know more

Kotak Lifetime Income Plan

Retirement years are the golden years of life. Know more

Close

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.

What are ULIPs and their Types?

A highly wise investing approach is to have a complete life insurance policy on yourself and to use your unused funds as well. There are distinct sorts of ULIPs that can be characterized in many ways. A ULIP, full form- Unit-Linked Investment Plan, is a g

  • Mar 02, 2022
  • 2,169 Views

A ULIP, full form- Unit-Linked Investment Plan, is a great investment option since it mixes insurance and investment. A part of the premium amount provides you with insurance coverage, while the remainder is invested in the stock market. Because a portion of the premium is constantly invested in the stock markets over time, the potential for returns is substantially higher than with other investments.

    Key takeaways

    Types of Funds

  • Equity
  • Debt
  • Liquid Funds
  • Balanced Funds
  • Cash Funds
  • Based on the Investment Objectives

  • To fund your child’s education
  • To build a corpus of funds
  • ULIP types based on wealth creation

  • Single premium and regular premium ULIPs
  • ULIPs for different stages of life
  • ULIPs with and without guarantees
  • To plan for retirement
  • To meet medical or personal emergencies

There are different types of ULIPs in India to suit various financial goals and risk profiles. In general, ULIP plans are categorized according to the types of funds in which your premium is invested or their ability to build wealth.

Types of ULIP

Types of Funds

The most popular types of unit-linked insurance plans in India are briefly described here:

1.Equity

Investors’ money is used to buy equity shares. Since investments in equity are directly linked to financial market changes, they prove to be highly risky. However, the potential for expansion is comparatively larger. Therefore, ULIP plans that invest in equity are appropriate for risk-friendly investors with a high-risk tolerance.

2. Debt

Debentures, corporate or government bonds and securities, and fixed-income bonds are among the debt instruments in which the funds are invested. Though these instruments have a medium to low-risk profile, they also include a moderate return profile.

3. Liquid Funds

These ULIP plans are ideal for reaching short-term financial goals since they invest in highly liquid money market products. These funds have a shorter maturity period (from weeks to months). Most of these ULIP investments have high credit ratings, making them a safe investment option for those with a low-risk tolerance profile.

4. Balanced Funds

Some ULIP plans invest in a combination of equities and debt assets to reduce risk. The risk is effectively spread across high-risk and low-risk investment avenues by allocating a part of the amount to equity and the other part to fixed-income debt instruments.

5. Cash Funds

These funds are invested in very low-risk cash fund instruments. While the profits are the lowest of all the available possibilities, the risk is also the smallest, making them an excellent alternative for risk-averse investors who aim to reduce risk as much as possible.

Based on Wealth Creation

1.Single premium and regular premium ULIPs

The former requires only a single premium payment at the time of purchase. On the other hand, the latter permits you to pay premiums regularly throughout the plan’s life, from purchase through maturity.

2. ULIPs for different stages of life

These are based on the premise that the risk-taking ability of investors decreases with their age. Therefore, a portion of the premium paid is invested in equity securities, while the rest of the amount is invested in debt instruments.

3. ULIPs with and without guarantees

Guaranteed ULIPs are concerned with capital preservation. By investing a small amount of the premium in equities, they restrict the exposure to market risk. However, non-guaranteed ULIPs are designed to maximize wealth creation by enabling investors to invest a larger amount of their premium in the financial market. As a result, non-guaranteed ULIPs have higher returns, but they are more volatile.

4. To plan for retirement

A retirement corpus building Unit-Linked Investment Plan (ULIP full form) can save you if your regular source of income quits and you’ve reached the end of your working years. There are particular ULIP programs created to care for you in your latter years. After the plan expires, they still offer regular payouts, and you will still get enough money to live comfortably. You won’t fully appreciate the advantages of working for money and having money work for you until these payments begin.

5. To meet medical or personal emergencies

There are occasionally significant expenses that we cannot avoid. When you least expect it, unexpected things like medical problems, accidents, legal costs, settlement amounts, debt, etc., can truly hit you hard. There are programmes that assist you in creating a corpus that you can utilise in place of a health insurance policy. The plan enables you to partially withdraw from your greater maturity corpus to cover the urgent expense if you are in the hospital and require rapid cash.

ULIPs Based on the Investment Objectives

1.To fund your child’s education

One of the more well-known advantages of choosing a ULIP is that it satisfies the criteria for protecting your dependents and children from financial hardship in the event of your passing and designs payouts so that they will be used for the appropriate purpose. Once a year, these ULIPs often pay benefits out when they are required for the intended use.

2. To build a corpus of funds

It is one of the most important types of unit-linked insurance plans that can be used to put unused savings to work, and one that also offers the option of life insurance protection effectively kills two birds with one stone. People typically let the insurance company manage their savings rather than going through hell to find the proper investment with the right interest rate and term.

When tackled through the conventional technique of hard labour, building a sizable corpus is a time-consuming endeavour. ULIPs, however, limit your involvement in the administration of money and allow you to share in the profits.

Conclusion

These categorizations convey that you can pick the right type of unit-linked insurance plan that meets your risk tolerance and long-term financial objectives. In addition, you can invest in a ULIP full form (unit-linked insurance plan), which allows you to pick from various funds with varied risk and reward formulae. As a result, they make informed decisions and take advantage of market fluctuations.

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

Kotak e-Invest

Download Brochure

Features

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

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

T&C

- A Consumer Education Initiative series by Kotak Life

Similar Articles

How to Calculate Your ULIP Returns?

ULIP Withdrawal Conditions - Before and After 5 years

Best Investment Plans for Children - Secure Your Child's Future

Receiving regular payouts at various stages of life

Balancing Investment Between Risk and Return on Investments

What are the Advantages and Disadvantages of ULIP?

Does Rupee Cost Averaging Work In Unit-Linked Insurance Plans?

Top 11 Investment Plans Available in India

What is Partial Withdrawal in ULIPs?

Why Should You Invest in NPS?

What are the Minimum and Maximum Investments in ULIP?

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

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

How Can a Legal Nominee Claim ULIP Benefits are the Policyholder’s Death?

यूलिप के फायदे (Benefits of ULIP in Hindi)

How Can ELSS Funds Help You Save Tax & Create Wealth?

ULIP vs FD - Which is Better and Why?

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

4 Rules To Keep In Mind To Secure Your Child’s Future Financially

5 Reasons to Have a Child Education Plan

ULIPs: Suitable for all

ULIP Plan as a Gift

यूलिप प्लान में परिपक्वता लाभ क्या हैं: फंड वैल्यू सम एश्योर्ड या ओनली फंड वैल्यू?

Top 10 Investment Strategies to Create Wealth

What are the Best Investment Options for Young Adults?

वित्तीय संपत्तियां और उनके प्रकार

ULIP Investment Strategy: Top Tips to Improve Your ULIP Gains

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

Are Investment Returns Guaranteed in a ULIP?

Savings Plan for Grandchildren

Best One-Time Investment Plans in India

Creating a second source of income with life insurance

The lesser-known facts about ULIP policy that customers should be aware of?

Tax-Deferred Savings Plan: Overview, Benefits, Works

What Is Financial Planning?

Benefits of ULIP as a Child Insurance Plan

Best Investment Options in India in 2022

What is ULIP Plan, and How Does it Work?

Develop an investing plan

How to Increase Net Worth Along with Family Protection

यूनिट लिंक्ड इंश्योरेंस प्लान में लॉयल्टी एडिशन कैसे काम करते हैं

ULIP Investment Benefits You Must Know

Why Should I Invest in ULIP?

How and when should you exit from bad-performing ULIP?

Investment Options for NRIs in India

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

What is a Bond Fund and How It Works?

What are the Best Investment Options For Females?

Best Investment Plans For You To Invest In 2023

What are loyalty additions, and how do they work in a ULIP?

What is Lock-In Period in ULIPs?

First Job? Here are Some Tips on How to Manage Finances

How has ULIP Grown Over the Last 3 years?

Building wealth through regular investing

यूलिप और उनके प्रकार क्या हैं?

What is SIP Calculator, and How it Works?

What are the Best Short-Term Investment Plans with High Returns?

All you need to know about claiming maturity proceeds from Ulip

8 Important Tips to Maximize Gains with ULIP Investments

यूलिप में 8 शुल्क जो आपको अवश्य जानना चाहिए

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

Here's Myths on Investments in ULIP Plans

Can NRIs Invest in ULIP Plans Offered in India?

How is the Compound Annual Growth Rate (CAGR) Calculated in ULIP?

Here's are the uses of ULIP your must be aware of

Can ULIP Help in Achieving Short-Term Financial Goals?

Planning For Children's Future

Four Financial Lessons from The Vedas on Living Life to The Fullest

How Much Wealth Can You Create From ULIP in 10 years?

ULIP NAV - Everything You Need to Know

Unit-Linked Life Insurance (ULIPs) vs. Term Insurance

How to Use Recurring Investment Strategies to Build Wealth?

What Is a Credit Score? Definition, Factors, and Ways to Raise It

How To Track ULIP Performance?

Which are the Best ULIP Plans in India for Children?

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

Which is a Better Investment - Mutual Funds Or ULIP?

Will AI be Your Future Financial Adviser? What Role Will Humans Play?

Can ULIP Policy be Transferred?

What are the Best Investment Options for Beginners or Amateur Investors in India?

How to Build a Strong Financial Foundation For the Future?

ULIP Plan or Traditional Insurance Plans - Which is better?

Rate of Interest on Different Investment Plans in India

Early Investing and the Power of Compounding

How to Fix the 9 Most Common Financial Problems Your Family is Facing

Here's Whether You Should Link ULIP Plan with your Term Insurance

What is Money Management? Definition & Example

Learn About Safe Investments with High Returns in India

Planning Financial Goals and Objectives of Financial Planning

Corporate Bonds: Meaning, Types & Benefits

Importance of Portfolio Management

Why are ULIPs One of the Best Tax Saving Instruments?

Is the surrender value of ULIP taxable?

How to Plan your Investment to Achieve Periodic Financial Goals?

How to Plan Your Child's Education - A Step-by-Step Guide

Is ULIP A Good Investment Option?

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

8 Charges in ULIP That You Must Know

How Much Wealth Can You Create from ULIP in 10 years?

What is ULIP Renewal?

How Safe is it to Invest in ULIP plans?

Why Do You Need A ULIP Plan - All You Need To Know

What's Better for Your Child's Education? Child Plans or Mutual Funds?

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

Top ULIP Myths That You Must Stop Believing In

What are the things to consider before buying ULIPs?

How To Invest Money In ULIP?

ULIP Vs Life Insurance Plan Know the Difference

यूलिप के फायदे और नुकसान क्या हैं?

Understanding ULIP Risks: What are the Odds of Losing all my Money and Projected Returns?

What are Fixed Maturity Plans and Why Should I Invest in Them?

How Can ULIP Plan be as an Investment for Your Child

What are Financial Assets & their types?

Can I Surrender My ULIP Policy after 2 Years?

What Is Social Impact Investing and How Does It Benefit Society?

What are Index Funds, and How Do They Work?

What is Savings and the Importance of Saving Money

Beginner's Guide to Wealth Creation: Meaning, Strategies, & Importance

Planning for Your Child's Higher Education? Explore These Investment Options

Top 5 Principles That Need to be Followed for Wealth Creation

How to Create Short-Term and Long-Term Wealth with ULIPs - Kotak Life

ULIPs Investment – A Boon or Bane?

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

Why ULIP is Better Investment for Long-Term Wealth Creation?

Will You Need to Withdraw or Surrender Money From ULIP

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

ULIP policy: What happens when you stop paying ULIP policy premium during lock-in period

Which is Better – FD, Mutual Fund, SIP, or ULIP?

Know Why You Should Stay Invested in Your ULIP Plan

How Increasing Your SIP Every Year Helps You Reach Your Financial Goal Sooner?

How to Start Saving Money in 10 Simple Ways?

Can You Invest in Both Term Insurance and ULIP?

What is ULIP and Its Benefits?

How to Save Money from Salary?

Got a Salary Hike? Here’s How to Plan your investment further

Debt ULIPs vs. Debt Mutual Funds: What's the Difference?

How to Manage Your Portfolio Like a Professional?

How to Make Your Financial Portfolio?

Customising investments to manage your wealth

ULIP Benefits You Can Avail from Early Investing

Different Types of ULIP Investments in India

FAQs on Taxation of ULIPs

How to Apply for Death Claim Benefits in ULIPs - Kotak Life

Long Term Savings Plan - Best Savings Investment Plans in India

Difference Between Passive and Active Investing

What is Fund Value in ULIP?

ULIP Plans Riders You Should Know About

How to Set Financial Goals for Your Future

Is ULIP a Complex Financial Product?

Do You Know the Difference Between Savings and Investment?

All you need to know about Fund Switching in ULIPs

5 Reasons to Buy ULIPS for a Financially Secured Future

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

Are Money Back Policies Helpful? A Complete Guide

How to Manage Inheritance Money?

Endowment Plan vs Fixed Deposit?

ULIP Frequently Asked Questions (FAQ) - Kotak Life

What is a Child Money Back Plan, and How Does it Work?

Asset Allocations in ULIP - Know the Top Benefits

5 Best Long Term Investments To Add To Your Portfolio in 2023

Safe Investment Options with High Returns for FY 2018-19

Do ULIPs Give Good Returns On Investments?

How ULIPs can help you achieve your financial goals

6 Important Tips to Maximize Your Gains with ULIP Investments

Planning For Son or Daughter's Wedding

What is the Time Value of Money (TVM)?

How Do One-Time Investment Plans Work?

What is Equity Mutual Funds: Meaning, Types & Benefits

Are Gains from ULIP Sale Taxable?

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

Is This The Right Time To Invest In ULIP? Why or Why Not?

Why Should You Build an Emergency Fund?

Best Investment Options to Cover Your Child's Education

Difference Between Linked and Non-Linked Insurance Plans

What are Some of the Safest Investment Options in India?

Factors Affecting Share Prices In The Stock Market

Successful Financial Planning for Urban Women

What is Mutual Funds? | How Mutual Funds Work, Definition

How to Cancel ULIP Policy?

What is a Savings Plan and What are is Benefits?

Difference Between ULIP and Endowment Plan?

Know How to Invest at Every Age for Larger Returns

Why is Portfolio Diversification Important? How to Diversify Your Portfolio?

Why Are ULIPs Called Flexible Investments?

Can You Have ULIP Plan and Health Insurance Plan Both?

What is Fund Switch in ULIP? And ULIP Fund Switching Techniques

Is Life Insurance Investment Worthy Enough

Top 5 Investment Options in 2022 for Healthy Returns

What is Direct Investment and its Types?

Why ULIP Should Be a Part of Your Investment Portfolio?

What are the Best Investment Options for Students in India?

What is Compound Interest, And How Do I Calculate it?

ULIP Capital Gain Tax: Check Tax Norms for Capital Gain on ULIPs

Investments Options to Buy a house in India

Here's Why it's a Good Time to Explore ULIPs as an Investment

ULIP As An Investment Option For Senior Citizens

Learn About Safe Investments with High Returns in India

Difference Between Guaranteed Savings Plan and ULIP