What is ULIP term plan?

What is ULIP term plan?

ULIP full form is Unit Linked Insurance Plan, which is a multi-faceted life insurance product. A ULIP plan is a combination of life insurance and investment. ULIPs requires you (as a policyholder) to make regular premium payments, part of which is utilised to provide life insurance coverage.

What term plan means?

A term plan is a specific type of life insurance policy that provides protection for a definite period of time or ‘term’. In the event of the unfortunate demise of the insured person during the specified term, the insurance company pays the beneficiaries of the insured a pre-determined sum of money.

Is ULIP plan good?

ULIPs are best suited for individuals with a long term financial plan of wealth creation and insurance. Whether it is for retirement, children’s education or for other financial goals, a ULIP continued till maturity works as an advantage. It gives you the dual benefit of savings and protection, all in a single plan.

What is the difference between ULIPs and term insurance?

Term insurance financially protects your family in case of your untimely death, while the premium paid in ULIPs is divided into two components, one of which is fixed as insurance while the other is invested in various funds. A ULIP aims to secure your financial future with investment, while Term Insurance secures your family when you aren’t around.

What are ULIPs and how do they work?

ULIPs, or Unit Linked Insurance Plans, provide you with life cover along with an investment avenue. One part of the premium you pay is used as mortality charges to offer you insurance, and the other part is invested in various investment options such as bonds, debts, equities, or a hybrid fund.

Is ULIP a good investment option?

ULIPs are hybrid products that provides insurance cover and an investment option. ULIP comes with lock-in period of five years and hence, is suitable for long-term investors. Though both the products are professionally managed, charges on ULIP are more in comparison to mutual funds.

What is mortality charge in ULIP?

In ULIPs, one part of the premium is paid towards the insurance and is called a mortality charge, while the other part is invested in different investment options like market funds, bonds, debts, equities, or a hybrid. The selection of funds is at your discretion.