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ULIP Schemes: Combining Market-Linked Growth with Essential Life Cover
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News18•29-09-2026, 17:45
ULIP Schemes: Combining Market-Linked Growth with Essential Life Cover
- •ULIP schemes integrate life insurance coverage with a market-linked investment component, allowing policyholders to work towards long-term financial goals while providing financial protection for loved ones.
- •When a premium is paid, a portion is allocated to an investment component to purchase units in selected funds (equity-oriented, debt-oriented, or mixed), while the other portion covers life insurance.
- •The value of investment units can fluctuate based on market performance, carrying market risk, and potential growth is not guaranteed unless explicitly stated.
- •Key factors to consider before choosing a ULIP include the amount of life cover, available fund options and their risk profiles, applicable policy charges, and the policy's terms and flexibility.
- •ULIPs offer an integrated approach, while separate insurance and investment plans provide independent management; the best choice depends on individual financial preferences and goals.
Key Questions Answered
A ULIP scheme combines a market-linked investment component with a life insurance coverage component within a single policy. When a premium is paid, a portion is allocated toward investments after applicable charges, while the insurance part provides life cover for the specified term.
Before choosing a ULIP, buyers should evaluate the life cover and death benefit, available fund options and investment risks, policy charges like fund management and mortality fees, and policy terms including flexibility provisions.
Kotak Life Insurance offers ULIP plans featuring a 99.5% claim settlement ratio for FY25 to 26, a solvency ratio of 2.21, and an NPS score of 60 which ranks second in the industry.
