What is the Full Form of ULIP in Insurance?
The ULIP Full Form in Insurance is Unit Linked Insurance Plan. It actually is a hybrid financial product with the help of which an individual can take the benefit of the insurance coverage and at the same time get a chance to invest in the market. The premium paid by the policyholder consists of an amount needed to provide life insurance coverage and a lot more, which is invested in different market-linked funds.
Unit Linked Insurance Plan Summary:
ULIPs merge the benefits of life insurance protection with the likely potential for investment growth. These provide policyholders the option to take a flexible call for deciding over various investment options according to their risk appetite and financial goal.
Key Features of ULIPs:
- Insurance cover: This is the amount of premium that goes to offer life insurance cover so that in the event of the policyholder’s death occurring in the term duration, the beneficiaries are entitled to claim the amount of financial benefits.
- Investment Component: The part of the premium, however, will be invested in funds like equity, debt, or balanced funds based on the selection of the policyholder. In this regard, direct impacts will be observed from the performance shown by such funds on the investments.
- Fund options: ULIPs offer a variety of fund options with different risk profiles to allow policyholders to choose the investment strategy according to the level of their risk appetite and investment objective.
- Tax Benefits: ULIPs offer tax benefits in accordance with the Income Tax Act under Section 80C for the premium amount and on maturity or death benefits, which are tax-free subject to conditions.