Evolution of United Linked Insurance Plan:

It was the time when the ULIP was introduced in the year 1971 by the Unit Trust of India, after that there were many insurance companies which introduced there insurance plans, in 2001 the Government of India gave the permission to the foreign investors to invest in the insurance linked policies. In today’s world there are lots of ULIPs which are available in the market which are very much beneficial to the investors.

Types of Unit Linked Insurance Policies:

There are various parameters on which the Unit Linked Insurance Policies can be classified:

  1. On the basis of Use of Funds:

For creating money – Many people may invest in this to increase the money they have invested and there may not be any investment for further expense there of.For medical benefits – Some one might have invested to get the medical benefits getting out of the insurance policy and no other objective.For Education purpose – Some ULIPs are also such that at the maturity period, you might get the benefit of low cost education but of the best quality, which might be the aim of some people.For Retirement – This might be the source of income those who have invested at the age of there investment and want to get the pension income at home by investing some amount in the ULIPs.

  1. On the basis of Benefits in case of Death:

Type 1 ULIP – This type of ULIP pays the assured sum value or the fund value whichever is higher in the case and pays that amount to the policyholder.Type 2 ULIP – This type of ULIP pays the sum assured + the fund value to the policy holder.

  1. On the basis of Nature of Investment:

Debt Funds – This type of the funds use the money of the customer or the policy holder in the debt market where the risks are low but with the same the returns are also low.Equity Funds – This type of the funds use the money of the customer or the policy holder in the equity market where the risks are high but with the same returns are also high.Combination – There might be the combination of both debt and equity investment, where they balance the risk so that the customer or the policy holder gets the aimed return and also the other benefits.

Benefits of ULIP:

The first and the foremost benefit of the ULIP is that it is a combination of two things – Investment & Insurance. So the policy holder gets the benefits of the both.As the investment are linked to the markets, there is a great opportunity for the policy holders to get into the high returns than the normal ones.There are lot of options available to invest into and so there is many choices available to the people to invest in to.They are many ULIP options which are very much liquid in nature, so in case of there is need of cash, they can be redeemed.Some of the ULIPs also offer the Tax Benefits to the policy holder under section 80D of the Income Tax Act which also allows to exempt.

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