1. What is the full form of ‘ULIP’?

‘ULIP’ stands for Unit Linked Insurance Plan. It can be considered a unique financial product combining the elements of life insurance and market-linked investments.

2. What Should You Keep in Mind While Investing in a ULIP?

Before investing in a ULIP, you may want to keep in mind the fund options of the plan, the charges levied, the solvency ratio, and the claim settlement ratio of the life insurance provider.

Yes, ULIPs are safe. If you are a risk averse individual, you may invest in predominantly low-risk funds like debt funds. Also, you may use premium redirection and fund switching to change your fund allocation for ensuring fund safety.

4. What is the maximum duration of the trial period or free look period of a ULIP?

The trial period or the free look period of a ULIP is typically 15 days from the date of receiving the policy document. In the case of electronic or online ULIPs, the free look period can be 30 days.

5. What is the best way to choose a ULIP?

Choosing a ULIP that fits your needs and requirements perfectly may be crucial to be able to satisfy your goals. You may want to compare several plans and choose an option that has fewer charges and has the fund options of your choice.

6. What is a ULIP NAV?

The Net Asset Value (NAV) of ULIP is the total assets of the fund, after deduction of any liabilities associated with the same. It can be calculated by using the following formula - NAV of ULIP = [(The total value of your ULIP fund) - (Any liabilities or charges)] / Total number of units

7. Are there single premium ULIPs?

Yes, there are Unit Linked Insurance Plans that offer a single premium feature. You have to pay the entire premium at once, at the time of purchase.

8. What types of payment does Bajaj Allianz Life accept for an online ULIP purchase?

You can purchase a ULIP by paying premiums through different payment modes available, such as net banking, credit cards, debit cards, or online wallets.

9. What are the risks associated with a ULIP plan?

Your ULIP performance depends on the funds you have invested and their market performance. Hence, a ULIP investor may have to deal with market risks and fluctuations.

10. What is the death benefit payable under a ULIP policy?

In case of the demise of the ULIP policyholder, the nominee may receive either the maturity amount or the death benefit of the plan, whichever is higher. This may depend on the type of ULIP chosen by the policyholder.

11. What is the limit for partial withdrawals in ULIPs?

The exact limit of partial withdrawals in a ULIP may vary from one insurer to another, as well as from one policy to another. In most cases, you may not be allowed to withdraw over a particular percentage of the fund value. Discussing the same with your insurer may help.

12. When is the right time to switch your ULIP fund?

A policyholder may switch their ULIP investment at any time they feel right. Usually, policyholders may opt to switch funds if the market moves significantly in a different direction. They may also switch funds if their risk appetite evolves.

13. What is a fund booster in ULIP?

For the uninitiated, a fund booster is a ULIP benefit that may be offered via certain Bajaj Allianz Life insurance products. It can enhance the amount you receive at the time of maturity. It may be considered as an incentive for paying your premiums regularly throughout the policy term and staying invested till the end of the policy.

14. Which investor class is a ULIP more suited for?

A ULIP investment may be suitable for investor classes of all types. An individual may invest in different types of funds ranging from equity funds to debt funds depending on the risk they are willing to take.

15. Which ULIP is suitable?

There may not be any single ideal ULIP policy for all. The suitable plan for you would be the one aligned with your financial goals, investment horizon, your needs, etc.

16. Can I Stop Investing in my ULIP?

Yes, you can stop investing in ULIP anytime you want. However, if you surrender your plan during the lock-in period, the life cover may cease immediately, but the surrender value is paid out only after the 5-year period.

17. Can ULIPs give high returns?

ULIPs can come with the potential to generate high returns, but which may be associated with higher risks as well. You may invest in equity funds if you have a high-risk appetite to potentially earn higher returns.

18. Can I get my premiums back if I am dissatisfied with a ULIP policy?

No, it is not possible to get your premiums back if you are unhappy with your ULIP returns. You can instead choose to switch your fund allocation or redirect your premium to other funds of your choice.

19. Can I invest more than the regular premium for ULIP?

If you want to invest more than the regular premium for your ULIP, you may opt for the top-up feature. It allows you to invest a top-up premium in your policy, over and above the regular premium.

20. Can NRIs Buy ULIPs in India?

Yes, Non-Resident Indians (NRIs) can buy ULIPs in India.

21. What Are Whole Life ULIP plans and Why You Should Get One?

Whole-life ULIP insurance plans provide life cover and maturity benefits until you attain the age of 99 or 100, depending on the plan you choose and the insurer. Whole life insurance can be beneficial for protecting your loved ones financially throughout your life.

22. What happens if payment of ULIP premiums is discontinued?

If you discontinue the premium payment of ULIP after the lock-in period, you may convert the policy to a paid-up one and withdraw the remaining funds of your plan. However, if you stop paying before the lock-in period, your policy will be automatically discontinued.

23. What is the meaning of absolute returns of ULIP?

They are the returns you can earn on your ULIP investment plan . They may be calculated by reducing your current NAV from the initial NAV to know the progress of your investment.

24. What is the difference between online ULIPs and offline ULIPs?

The key points of difference between online and offline ULIPs may be the cost and the mode of purchase. When you buy a ULIP online, there may be no intermediaries or agents involved, and so, the cost might be affordable.

25. Will there be a tax implication at the time of switching for policies purchased before 1 February 2021?

There may be no tax implications for switching funds for a policy bought before 1 February 2021, provided that the conditions under Section 10(10) of the Income Tax Act, 1961 are satisfied. [1]

26. Are death benefits from single premium policies with a premium in excess of Rs. 2,50,000 taxable?

Yes, since the premium payable for a year of the policy exceeds Rs 2,50,000, the ULIP may not qualify for any exemption under section 10(10D) of the Income Tax Act, 1961 [1]

27. In which tax regime can I get tax benefits on ULIP premiums?

You can claim tax benefits on ULIP premiums in the old tax regime under Section 80C of the Income Tax Act, 1961. There may be no benefits of deductions available for ULIP premiums in the new tax regime. [1]

Unit Linked Insurance Plans: Buy Best ULIP Plans Online 2025

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What is a ULIP (Unit Linked Insurance Plan)?

The meaning of ULIP is quite simple: it is a market-linked plan wherein one can avail life insurance coverage and also invest in different funds. Similar to other types of life insurance, you are required to pay premiums for your ULIP. This ULIP premium may be invested in funds of your choice and also be directed towards building the life cover. When your plan matures, you get the fund value consisting of the amount you invested along with the returns you earned on it. In case of your unfortunate demise, your nominee may receive the death benefits of the plan.

How ULIP Works?

Here's how it works in detail:

The premium you pay is used to meet two key financial goals, life insurance and investment.
Your money is invested in market-linked funds that you get to choose. The total amount invested may be divided into units, with each having a specific face value.
The value of each unit is referred to as the NAV. It can reflect any increase or decrease in the value of the underlying assets.
If you make partial withdrawals from the accumulated corpus, the corresponding number of units are sold.
At the time of maturity, you may receive the total fund value .
In case of your demise within the policy tenure, your nominee can receive the death benefit which may be the sum assured amount or the total fund value of the plan, basis the type of plan.

Why Invest In ULIP

Steps for Buying A ULIP Online

After knowing the benefits of ULIP, you may consider buying one online through a straightforward process. Follow these steps to acquire a ULIP-based product online seamlessly:

Go to the official website of the insurer offering ULIP products.
Browse through the available ULIP products and select the one aligning with your financial goals and risk appetite.
Determine the desired policy duration and select the premium payment amount suiting your budget and financial objectives.
Once you have made your selection, proceed to the payment section of the website.
Choose your preferred modes of payment, such as net banking, credit card, debit card, or online wallet.
Make the payment using your selected payment method and confirm the purchase.
After the successful payment, you may enjoy the advantages and benefits of your newly acquired Unit Linked Insurance Plan.

By following these steps, you may conveniently purchase a ULIP online, saving time and ensuring a hassle-free experience. You can also use a ULIP calculator to get an estimate of your investment needs.

How to Choose A ULIP?

Understanding what a ULIP is may drive you to invest in one. There are different types of ULIP plans options you may choose from based on your needs and financial goals. Here are some suggestions that can help narrow your choices:

Analyse your personal goals

Before choosing a plan, it may be essential for every investor to analyse their personal goals. You can invest in ULIPs keeping your personal goal in mind, like buying a house or planning for retirement.
Align your plan with your investment goals

Before buying a ULIP policy, keep your investment goals clearly defined. For example, if you want to have a major stake in high-risk investments, you can think of investing in equity ULIPs.
Compare ULIPs

You may compare the different features and advantages offered by each ULIP to determine the one that suits your specific needs. This may help you get the optimum maturity or death benefits.
Take Advantage of ULIP Flexibility

ULIPs may offer investors a range of investment options and tenures to choose from depending on their risk appetite and financial goals. You may choose the suitable funds and tenure accordingly.
Analyse Features and Benefits of ULIPs

Every ULIP has unique features and benefits. Having a proper understanding of their pros and cons and comparing their features may help you select a ULIP plan of your choice.
Check the Solvency Ratio

An insurance company’s solvency ratio may showcase whether it may be able to honour its claims in the future or not. An insurance company must have a solvency ratio of at least 150% as mandated by IRDAI.
Check the Claim Settlement Ratio (CSR)

The percentage of the total death related claims settled against the death claims received by an insurance company in a financial year is termed as CSR. A high CSR may indicate the insurer's reliability in settling claims.
Pick an Investment Strategy

Some ULIP plans have a focused goal that serves particular needs of the investors. For instance, a ULIP for retirement may focus on creating wealth for post-retirement needs. Going with a particular investment strategy may help investors generate regular income and fund future goals.

Benefits of ULIP

A ULIP may offer a host of benefits that go beyond traditional insurance or investment plans. They may include:

Maturity Benefit: Unlocking Your Accumulated Fund Value

Upon reaching the maturity of your ULIP plan, a rewarding benefit may await. You may become eligible to receive an amount equal to the accumulated fund value, serving as a maturity or survival benefit. This may ensure your investment grows over time and rewards your commitment. In case you pass away unfortunately, the maturity benefit may be passed down to your beneficiaries. Depending on the policy, they may receive either the sum assured or the fund value, depending upon the type of ULIP.
Death Benefit: Protection for Your Loved Ones

In the unfortunate event of an untimely demise during the ULIP policy tenure, your family may receive the ULIP death benefit. This financial support, paid out according to the policy's terms and conditions, may ensure that your loved ones are safeguarded in challenging times. It may also be noted that, regardless of the changes in the investment amount and fund structure, the death benefit stays unaffected. It may be considered as the base of any life insurance plan and likely stays fixed through the tenure.
Asset Allocation: Empowering You with Choice

Unit Linked Insurance Plans can provide a unique advantage through asset allocation. This strategy may allow you to allocate your capital across different ULIP funds offered under your policy. By investing in equity funds, debt funds, or a balanced mix of the two, you may align your investments with your risk appetite, market ups and downs, and financial goals. This flexibility may empower you to navigate the market and potentially optimise your returns.
Wealth Generation: Harnessing Market-Linked Growth

A ULIP investment may offer the potential for market-linked wealth generation over the longer term. Short-term market volatility may exist. However, if one looks at it historically, investment in market-linked funds may have favourable performance if one holds it over extended periods. By harnessing this growth potential, ULIPs may contribute to building wealth and achieving your long-term financial aspirations.
Tax Benefits^[1]

ULIPs not only provide you with the opportunity to grow your wealth and protect your loved ones but may also offer significant tax advantages. Here are several ULIP tax benefits:
Stage 1: Entry Benefits - Avail Deductions on Premiums

The premiums you pay towards your ULIP may be eligible for deduction from your taxable income, as per Section 80C of the Income Tax Act, 1961. You may claim a deduction of up to Rs.1.5 lakhs, subject to the provisions mentioned in the Act.
Stage 2: Earnings Benefits - Tax-Free Growth

As your ULIP investments appreciate over time, the earnings or gains may not be taxable as long as you keep the funds invested. This means you may enjoy tax-free growth on your ULIP investments until you decide to withdraw or redeem them.
Stage 3: Exit Advantage - Tax Treatment at Maturity and Demise

The death benefit amount your nominee may receive may be tax-free as per Section 10(10D) of the Income Tax Act, 1961. For you to get tax exemption on maturity, the premium of the ULIP purchased after 1st April 2012 should not exceed 10% of the death sum assured. If the ULIP is purchased before 1st April 2012, the premium should not exceed 20% of the sum assured. Also, as per the 2021 budget, if the total aggregate annual premiums of ULIP purchased on or after 1st February 2021 is above Rs 2.5 lakhs, the maturity proceeds cannot be tax-exempted. Any returns you may receive from equity funds above Rs 1 lakh may be taxable as per the Long-Term Capital Gains (LTCG) tax rate of 10%. In the case of non-equity assets, returns above Rs 1 lakh may be taxed at a 20% rate.

Advantages Of ULIP

Why Monitoring Your ULIP Fund Performance is Crucial?

Keeping a close watch on the performance may be vital to regularly monitor and evaluate the performance of your ULIP funds. It may also be essential for the following reasons:

Managing Risks

With a ULIP plan, you have to bear market-related risks associated with your investments. Monitoring the performance of your ULIP funds may enable you to gauge whether the risks may be within your tolerance levels. By being well-aware, you may make informed decisions to mitigate potential risks.
Switching Funds

ULIPs may provide the flexibility to switch between different funds based on changing market conditions and your evolving life goals. By actively monitoring your ULIP performance, you can gain insights into when it might be appropriate to switch funds. This may empower you to align your investment strategy with your financial objectives effectively.
Achieving Long-term Goals

Regularly assessing your ULIP performance allows you to track your progress toward your long-term financial goals. By ensuring that your investment remains on track, you may avoid falling behind in achieving your life goals. If there may be any discrepancy with the fund and your goals, you may want to take some steps to align them again.
Checking Fund Performance

If you have invested in a ULIP plan from Bajaj Allianz Life Insurance Company, you can check your ULIP fund performance on our website. This may help you get a clearer idea of where your funds may be going and what you may do to improve them if needed.

ULIP Charges

Familiarising yourself with the ULIP charges levied to cover expenses and risks may be crucial. It may give you a better understanding of when and why they are levied, enabling you to make an informed decision. Here is a list of major ULIP charges:

Charge Type	Description
Fund Management Charges	The money you invest in a ULIP is managed by expert fund managers. These professionals can make investment decisions, monitor assets, and may aim to optimise returns. Hence, a fund management charge may be levied by the insurer to provide for this expertise.
Policy Administration Charges	Managing ULIPs involves administrative tasks like paperwork and record keeping. To cover these expenses, insurance providers may deduct policy administration charges from your policy account.
Mortality Charges	ULIPs include a life insurance component, providing a death benefit to the nominee in case of the insured person’s demise during the policy term. To account for this risk, insurance providers may levy mortality charges on ULIP. Some new-age ULIPs, including those offered by Bajaj Allianz Life, feature the Return of Mortality Charges (ROMC) benefit. If the policyholder survives the policy term, the initially levied mortality charges may be returned at maturity, reducing the overall cost of investment.
Premium Allocation Charges	These charges may be deducted upfront as a percentage of the premium. Premium allocation charges may account for the initial expenses incurred by the insurance company when issuing the ULIP, such as underwriting expenses and distributor fees.
Policy Discontinuance Charges	ULIPs typically have a lock-in period of five years. If you decide to surrender your ULIP before this period and discontinue premium payments, the insurance provider may levy policy discontinuance charges. The charges may depend on the year in which you stop paying the premium.
Partial Withdrawal Charges	After the completion of the 5-year lock-in period, ULIPs can allow for partial withdrawals. While some plans may offer unlimited free partial withdrawals, others may have a limit. If you may exceed the permitted number of free withdrawals, additional ULIP charges may be applicable.
Fund Switching Charges	One of the unique features of ULIPs may be the ability to switch your investment partially or completely between funds. This flexibility may allow you to align your portfolio with changing market cycles and risk tolerance. While some insurers may not charge for fund switches, others offer a specified number of free switches per year. If you exceed this limit, you may be subject to fund switching charges based on the policy’s terms and conditions.
Miscellaneous Charges	Under this category, you may encounter additional charges for making changes to your ULIP contract, such as adjusting the premium payment mode. These miscellaneous charges may vary based on the specific alterations you make.

What is NAV in ULIP?

A ULIP NAV is the daily calculated value of units held in a ULIP fund. It may represent the market worth of the units and may help investors track the performance of their investments. By monitoring the ULIP NAV, investors may make informed decisions about their investment strategies. NAV is calculated by dividing the total net assets of the fund by the total number of units outstanding. This formula can help determine the value of each unit in the ULIP fund.