Close Button Close Button
X
NRI Services Helpline

Calling FromPhone Number
Calling us from INDIA18002097272 (Toll Free)
Rest of the World+912067871700
(Call charges apply)

Switching Investment Mix in ULIPs

Selecting a ULIP plan has the advantage of obtaining two benefits at once, life cover or insurance as well as an opportunity to build up your wealth in a way that will grow it. But what happens if your selected fund is no longer performing as well as you thought? That is when you can benefit from the ULIP fund switch option. You could switch your fund from equity to debt, or vice versa, if you want to switch based on market performance or your needs and desires. You are not starting a new policy now and would simply switch your existing money to a new fund in your ULIP. That in itself gives ULIPs flexibility and ease in planning for the future.

Get in Touch to Know More
I agree and consent to the Terms & Conditions, Privacy Policy
Get Your Life Goals, Done!

Tailored Life Insurance Solutions for your long-term Life Goals.

Written ByShruti gujarathi
AboutShruti gujarathi
LinkedIn Icon
Shruti gujarathi has 5 years of experience in the BFSI sector, and as Manager- Digital Marketing at Bajaj Allianz Life Insurance, manages digital and content marketing. She has had hands-on experience in content strategy, performance marketing and Strategic Alliances over a career spanning 10 years.
Reviewed ByRituraj Singh
AboutRituraj Singh
LinkedIn Icon
Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 10th May 2025
Modified on: 14th May 2025
Reading Time: 15 Mins
Share

What is a 'Fund Switch'?


A ULIP fund switch means changing your current fund option in a Unit-Linked Insurance Plan (ULIP) to another available fund. It helps you adjust your money between different funds, such as equity, debt, or balanced, based on market conditions or your personal preference. This option is given by most ULIP plans and can be done online or offline.


The best part is that many insurers offer free switches up to a certain limit, like 4 to 20 times a year. After that, a small charge may apply. Fund switching in ULIP is not about starting a new plan—it’s just changing where your money is placed. This simple step helps you manage risk and returns better over time.


What Are ULIPs and How Do They Work?


A ULIP (Unit Linked Insurance Plan) is a type of life insurance plan that allows you to grow your money. It offers two key benefits: life insurance cover and market-linked fund choices. The money you pay (premium) is split into two parts. One part gives you life cover, and the other goes into a fund you choose, like equity, debt, or a balanced fund.


You can choose your ULIP allocation strategy based on your risk level. If you are young and want to try higher returns, equity funds can be an option. If you prefer safety, debt funds are better. Balanced funds are a mix of both. The special thing about ULIPs is that you can change your fund anytime with a ULIP investment switching option. ULIPs usually have a lock-in period of 5 years, and they also offer tax benefits under Section 80C (under old tax regime) and 10(10D) of the Income Tax Act subject to certain conditions.


When to Switch Funds in ULIPs?


Switching funds in ULIPs can help you get better outcomes. But when is the right time to switch? Here are some simple tips:


  • Market Changes:


    If equity markets are falling and you want to protect your returns, you can switch to debt funds.
  • Life Stage Changes:


    As you get closer to your goal or retirement, switch from high-risk to safer funds.
  • Performance Drop:


    If your chosen fund is not performing well for a long time, it might be time to change.
  • Goal Adjustment:


    If your financial goals change, your ULIP fund choice should match the new goal.
  • Rebalancing:


    Your ULIP mix may shift over time. Switching helps you return to your chosen ULIP allocation strategy.

What are the Benefits of Switching Funds in ULIPs?


Switching funds in ULIPs has many simple benefits:


  • Helps in Risk Management:


    You can move from risky equity to safe debt funds.
  • Gives Better Control:


    You can manage your ULIP investment switching as per your comfort.
  • No Tax on Switches:


    Fund switches in ULIP are not taxed as long as the plan is active.
  • Goal Matching:


    Your fund type can change with your financial goals, giving better results.
  • Protects from Losses:


    In case of a market drop, you can shift your funds to limit losses.
  • Builds Discipline:


    You keep track of your plan regularly, which improves money habits.

Charges Levied on Switching Funds in ULIP Plans


Many insurance companies allow a set number of fund switches in a year at no cost. Depending on the insurer, this can range from 4 to even 20 times. But after you use these free switches, you may need to pay a small charge for every extra switch. This is called the fund switching charge.


For example, the charge may be ₹100–250 per switch after you cross your free limit. These charges are written in your policy document. Always check your ULIP plan details to know the exact number of free switches and the cost afterwards.


Even though a small fee may apply later, the ULIP fund switch feature is still helpful in the long run, helping you balance your returns and reduce risks.


Conclusion


ULIP fund switch is a helpful tool that gives you control over how your money is placed within the plan. It offers the flexibility to manage changes in the market and personal needs. Here are the key takeaways:


  • You can switch between equity, debt, or balanced funds based on goals or the market.
  • Most plans offer free switches every year. After the limit, a small charge may apply.
  • Switching does not impact your insurance cover (in most cases), only the fund value.
  • ULIP investment switching helps you match your money plan with life events or market trends.
  • It's easy to switch online on the insurer’s portal or by visiting the branch.

Using this feature wisely lets you make the most of your ULIP policy without extra hassle.


FAQs


What is a ULIP fund switch?


A ULIP fund switch means changing your money from one fund to another within your ULIP policy. ULIPs have different types of funds like equity (for higher risk and returns), debt (for safety), or balanced (a mix of both). You can switch your money between these based on your needs or market conditions. This switching does not affect your life cover. It only changes where your money is invested. You don’t need to buy a new policy. You can simply move your money from one fund to another as per your comfort and preference.


Can we switch funds in ULIP?


Yes, ULIPs do allow you to switch funds. Most insurance companies allow certain fund switches for free; you often find an allowable number per year. If you only get 4 or even 20 free fund switches, the company would charge you a small fee for additional fund switches if you go beyond the stated free switches. This flexibility allows you to adapt the placement of your money to the market and your goals in life. Switching funds is simple and easy, and can be done virtually or through the company branch. Switching funds might allow you more control over how your money is managed in the product.


What does it mean to switch funds?


Switching funds in a ULIP means moving your money from one fund type to another. If you feel the market is risky, you can shift from equity to debt. If the market is doing well, you may return to equity for better growth. This does not mean you are ending your policy. You are only changing the fund where your money is placed. It helps you reduce risk, manage returns, and stay on track with your financial plans. Fund switching is a simple way to keep your ULIP working smartly.


Why should I switch funds in my ULIP?


Being able to switch funds in your ULIP means you can better manage the ups and downs of the market. If the stock market is trending downward, you can switch to debt funds that are safer. If values in the market are moving up, you can switch back to equity to make more money. The option to switch funds helps as life stages change, too. For instance, you could prefer safe options if you are nearing retirement. You may be willing to try some higher-return funds if you are younger. Switching funds also helps align any plan with new goals, like your child's education or home purchase. The option to switch gives peace of mind and flexibility.


Life Insurance Guide -Life Insurance Related Articles

Long term investment plans - What Are Their Benefits?

A suitable financial plan may be defined by its components. Amongst other things, one aspect, it may be incomplete without, is a steady amount of investment.

Read More
Long term investment plans - What Are Their Benefits?

A suitable financial plan may be defined by its components. Amongst other things, one aspect, it may be incomplete without, is a steady amount of investment.

Read More
Long term investment plans - What Are Their Benefits?

A suitable financial plan may be defined by its components. Amongst other things, one aspect, it may be incomplete without, is a steady amount of investment.

Read More
Long term investment plans - What Are Their Benefits?

A suitable financial plan may be defined by its components. Amongst other things, one aspect, it may be incomplete without, is a steady amount of investment.

Read More
Disclaimers:
Plus Symbol
Minus Symbol

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

The Unit Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.

ULIPs are different from the traditional insurance products and are subject to the risk factors. The premium paid in ULIPs are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.

 The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read the sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale. Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in

Tax benefits as per prevailing Section 10(10D) and Section 80C (under old tax regime) of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

BJAZ-WEB-EC-14870/25

X
Disclaimer

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

X
Disclaimer

%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Disclaimer

The Unit Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.

ULIPs are different from the traditional insurance products and are subject to the risk factors. The premium paid in ULIPs are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Bajaj Allianz Life Insurance Company Limited is only the name of the Life Insurance Company and Bajaj Allianz Life Goal Assure II- A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN No.: 116L180V02) is only the name of the unit linked insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.

Bajaj Allianz Life Goal Assure II - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L180V02)

**Return of Mortality Charges at Maturity (ROMC) is payable at maturity, provided all due premiums have been paid

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


close
Ask for an Agent
Sign up for personal visit and tailored advice from our expert agents

Claim Settlement Ratio of 99.29%~