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


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 the Benefits of ULIP - Explained

Unit Linked Insurance Plans (ULIPs) are insurance products that combine investment and insurance into a single package. Read ahead to know its benefits.

  • Apr 14, 2022

Investing money to secure your future is becoming the norm now. However, at the same time investing in the right place can be a challenge for many. There are so many investment options and opportunities available today that it is quite tough to pick the right one for yourself. The main goal behind picking the right investment plan is to ensure that the returns match your future financial needs, be they short-term or long-term financial goals.

    Key takeaways

  • ULIP is one of the popular investment plans among investors these days.
  • Unit Linked Insurance Plans, commonly known as ULIPs, are financial instruments that offer dual benefits of investment and insurance.
  • ULIP plans allow you to have a transparent investment scheme.
  • When you opt for ULIP, you can make a partial withdrawal once the lock-in period is over.
  • ULIP allows you to keep up pace with the market growth and inflation as a part of your premium is invested in market funds.

What is ULIP?

ULIP is one of the popular investment plans among investors these days. Being a modern investment tool, it allows investors to diversify their portfolios, unlike traditional investment options. In addition to the ULIP benefits, you also get the option to invest your money in the market. Not only this, the ULIP tax benefits serve as icing on the cake. ULIP tax benefits are uniform and regularized by the government during the Budget 2023 session. Thus, you can avail of the ULIP tax benefits, irrespective of the ULIP plan you opt for.

Find the right information about ULIPs, their advantages, and disadvantages of it, and make an informed decision.

This article will briefly discuss ULIP benefits, the benefits of ULIP over mutual funds, and ULIP insurance benefits.

Top 7 Unit Linked Insurance Plan(ULIP) Benefits

Unit Linked Insurance Plans, commonly known as ULIPs, are financial instruments that offer dual benefits of investment and insurance. It is a combination of life insurance and investment, where a part of the premium paid goes towards providing insurance coverage, and the remaining amount is invested in various market-linked funds.

ULIPs have gained popularity in recent years due to their unique features and benefits. Here are 7 major benefits of ULIPs in detail.

Flexibility And Diversity

When an investor opts for a ULIP policy, he has a host of high-risk, medium-risk, and low-risk fund options to choose from under the same plan. The policyholder can choose as per their risk-taking appetite.

In addition to this, you also get ULIP insurance benefits. One gets to flexibly choose premiums based on their financial needs or the sum assured. Moreover, if you want to add more to your policy above your premium by opting for ULIP top-up option.

So, in case you see a good investment opportunity, or you earn a bonus that you want to invest in, then ULIP insurance benefits allow you to do that. Also, with ULIP, you get to have market-linked financial growth without directly investing in the stock markets and get a life-cover ULIP benefit.


When we talk about the top benefits of Unit Linked Insurance Plans (ULIP), transparency is an important one. ULIP plans allow you to have a transparent investment scheme. When opting for ULIP, the policyholder is made aware of the complete charge structure, the investment value, return rate expectations, and other important details for the complete policy tenure.

This is important because it is your right as an investor and a great move to understand all the important details about a policy before putting your hard-earned money into it.

Partial Withdrawal

Liquidity is a major factor that decides whether a person will invest in a financial scheme/policy/plan or not. When you opt for ULIP, you can make a partial withdrawal once the lock-in period is over.

Tax Benefits oOf Unit Linked Insurance Policy

ULIP plans tax benefits are something that attracts many investors towards it. According to the IT Act Section 80C and Section 10 (10D), you can easily take ULIP plans tax benefits. The premiums of up to ₹1.5 lakhs/annum are exempted from tax, and the maturity amount is also exempted from tax.

However, to prevent the misuse of ULIPs, the government brought some changes to higher investment in ULIPs. ULIP has better tax benefits than mutual funds as mutual funds qualify for exemption under the sections mentioned above in the IT Act.

Great Disciplined Long-Term Savings Tool

Honestly, ULIPs serve as a great long-term investment tool that helps you in creating good savings in the long term. Not only that, it allows you to keep up pace with the market growth and inflation as a part of your premium is invested in market funds.

Long-term wealth creation

ULIPs are a long-term investment option that can help policyholders create wealth over the long term. By investing in market-linked funds, policyholders can benefit from the potential returns offered by the equity market. Additionally, ULIPs have a lock-in period of five years, which helps policyholders stay invested for the long term.

Dual benefits of insurance and investment

The primary benefit of ULIPs is that they offer both insurance and investment benefits. The insurance component of ULIPs ensures that the policyholder’s family is financially protected in case of any unforeseen event. At the same time, the investment component helps the policyholder create wealth over the long term.

Wrapping Up

ULIPs offer a unique combination of insurance and investment benefits, along with flexibility, transparency, tax benefits, and long-term wealth creation. However, before investing in ULIPs, it is important to understand the charges, fees, and risks associated with the investment. Additionally, policyholders should choose the investment portfolio based on their risk appetite and financial goals.

Kotak Life Time Income Plan

Download Brochure


  • 6 Plan Options
  • Tax benefits ^
  • Higher annuity rates for higher purchase price
  • 4 Annuity Modes

Ref. No. KLI/23-24/E-BB/1052


- A Consumer Education Initiative series by Kotak Life

Similar Articles

Here's are Advantages of Pension Schemes and Retirement Plans

Long-Term Investing: Boost Retirement Income with an Income Booster

How to Register An EPF Grievance Online

How should one decide on fund allocation within NPS?

Types of Pension Plans and Their Tax Benefits

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

3 Ways to Save Early to Keep Living Out Your Dreams Post Retirement

A Quick Guide to Retirement Plans

Plan Your Retirement in India - Retirement Calculator

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

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

4 Tips to Avoid Running Out of Money in Retirement

Here's Benefits of Post Retirement Investment Options

What is a Retirement Plan - What are its Features?

How Can NPS Help You Save Tax?

Here's Retirement Planning Guide for Working Men & Women

5 Best Investment Options for Senior Citizens in India

The Significance of Number 8,000 in Retirement Planning

Retirement Planning: Use our Retirement Calculator to Plan Ahead

Is ULIP Better Than FD?

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

Do Pension Plans Allow Any Death Benefits?

Tips to invest your voluntary retirement scheme money

Importance of financial Planning for Retirement

How Do Annuity Options Work In NPS

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

What are the Rules for Exit From NPS?

Understanding Annuity Plans

How To Choose The Right Pension Plan?

Which Is Better: ULIP or SIP?

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

Inflation: A Key Factor to Consider into Retirement Planning

Embracing the FIRE Movement: Financial Independence and Early Retirement

Retirement: A New Start to Life!

Retirement Planning for Millennials

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

How to Maximize Your Retirement Savings with a Pension Scheme in India

How Much Corpus Does One Need for Retirement?

Turbocharge Your Retirement Savings with Annuities: Unlock Greater Returns

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

Which are the Best Investment Plans for Indian Senior Citizens in 2022?

What are the Charges Levied on ULIP?

What Retirement Would Look Like 30 Years From Now

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

Gift Your Parents a Sound Retirement Plan

The Rise of ESG Investing in Retirement Planning

Benefits of Annuity Plan Investment

How To Check EPF Claim Status- The Complete Process

Ten Signs That You're Ready to Retire

Is an Annuity a Good Investment Option?

Types of Pension Plans for Your Retirement

What is a Defined Benefit Plan and How it Works?

What Are Mortality Charges In ULIP?

Mastering the 30:30:30:10 Rule: A Guide to Effective Retirement Planning

How to Save for Retirement With Retirement Investment Plans?

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

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

Different Types of Retirement Schemes

How Does ULIP Work in India?

Mistakes You Must Avoid While Planning Retirement

What Are Retirement Pension Plans?

What are the Instruments Available for Building a Retirement Corpus?

How to Win at Retirement Savings?

Terminologies You Should Understand About Retirement Plans

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

Benefits of Early Retirement Planning in India

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

Retiring soon? Here’s why buying annuity plans may make sense

What is the Minimum Lock-in Period for ULIP?

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

Benefits of Early Retirement Planning

Guide to Long Term Investment

What tax benefits are there on saving for retirement?

Top Investment Options for Retirement Planning

Retirement planning with a systematic life insurance plan

Early Retirement Planning Tips

ELSS vs ULIP: Which is a Better Investment?

Types of Retirement Plans

Pension Funds In India – Meaning, Overview, How Do Pension Funds Work, Types, Pension Plan Features and Tax Benefits

What are the Differences Between ELSS ULIP and Mutual Funds?

Importance of Retirement Planning

What Is A 401(k) Retirement Plan?: A Beginner's Guide

Demystifying Retirement Financial Planning

Reasons you should Buy a Retirement & Pension Plan

Which Pension Plan Suits You best?

Retirement Planning at 50? You Are Still Good to Go

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

Changing Jobs? Reinvest Your Retirement Funds

Managing Your Money After You Retire

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

Meaning of Sum Assured in a ULIP

How to Protect Your Retirement Account from Hackers

How to Calculate Your Retirement Corpus?

Why is it Good to Have a Retirement Plan Before Your Marriage?

7 Secrets that can Make Your Post-Retirement Phase Prosperous

Right Age for Retirement Planning and How to Go About It

7 Best Guaranteed Income Plans 2023 in India Their Eligibility, Features & Benefits

6 investment options for the retired

How Does NPS Work?

What Are Superannuation Benefits?

Turbocharge Your Retirement Savings with Annuities: Unlock Greater Returns

15 Passive Income Ideas for Seniors to Boost Retirement Income

How Has NPS Performed in Comparison with Other Instruments?

Know the Pros and Cons of Retirement Annuities

Top 3 Reasons Why You Should Start Retirement Planning Early

14 Tips to Ensure Successful Retirement Planning

NPS for Housewife