Unit Linked Insurance Policies (ULIP's)

A Unit linked insurance plans are a special kind of insurance policies which have a benefit of life insurance and also serves as an investment tool. In a unit linked insurance plan there are two parts in the premium a client pays, the first part of the premium goes into covering the life of the policy holder and the second part goes into investments. Almost all insurance companies give their customers a choice to select the investment mix. They can go for 100% equity funds or 100% debt funds or a mixture of both. In a unlit linked insurance plan the customers are also given choice to switch from one fund to another. The returns from the insurance policy is directly related to the performance of the funds. The only drawback of unit linked insurance plans is its charges for first few years, which varies from 30% to 70% of the premium.