Unique features of ULIP Policy


ULIP stands for unit linked insurance plan. To help you achieve your wealth targets and manage them well, a ULIP policy is what you need. A ULIP policy is a combination of an insurance plan, which includes both medical as well as term insurance and an investment in equities. If you make an investment in ULIP policy, then the funds you invest are segregated into different components. A minor amount goes towards your health and term insurance needs and the remainder of the investment sum goes towards equities. The major point in favour of an investment in ULIP policy is that it assists an investor in not only creating wealth but at the same time offers them protect their healthcare requirements. 

The unique features of a ULIP policy are as follows:

  1. The nominee will be paid the sum assured upon the death of the policyholder. However, if the policyholder survives the tenure, then he/she will be paid the amount that is generated by the equity investment part of the policy.
  2. Another feature that is a positive scenario is that if the policy value falls below the sum assured specified in the ULIP policy, and then upon the death of the policyholder, their nominees will not get the lower amount. Nominees will be able to claim the sum assured specified in the ULIP policy documents.
  3. ULIP policy also aids one in inculcating the habits of savings. If one wants to amass huge wealth, one sure-shot way of doing so is wielding the power of savings and investments and being consistent with it.
  4. ULIP policies offer the investor with tons of flexibility. The flexibility is in the way money is controlled. The investor has the power to switch funds, redirection of premium, partial withdrawal, although partial withdrawal is dependent on the insurers’ terms and conditions. A top-up option is also available to invest surplus savings.
  5. The policy also provides the customers with many tax benefits. The benefits are available in the form of tax deductibles under various sections of the Income Tax Act, 1961. Even partial withdrawals are exempt from taxable income.
  6. Emergencies and unexpected situations are something that is inevitable. Most of us do not have sufficient liquid funds that will support us in times like these. A ULIP policy being liquid can help one navigate through the times of financial woes. This is possible because of the partial withdrawal.
  7. Markets are not always stable. They are volatile and are dependent on various factors, which are not in anyone’s control. ULIP policies offer up loyalty rewards to those investors who did not cash out during volatile times. These rewards can be in the form of wealth boosters, bonuses and loyalty additions. This helps you increase your maturity corpus and provide you with better benefits in the end.

ULIP policies provide its investors with complete peace of mind because of its approach to investment. ULIPs are balanced in nature.  They provide what most investors are looking for with their surplus funds. The longer you stay invested, the more you earn is the case here.

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Frances Garret