A summary of Unit Linked Insurance Policies:
Unit Linked Insurance Policies or ULIP is an insurance policy that offers you the perspective of wealth creation by providing the security of life insurance. In this plan, the policyholder should pay the premium either monthly or annually.
A small quantity of the premium will go to secure life insurance, and the rest of the premium is invested in a mutual fund. The policyholder will invest his or her money for 5, 10, or even 15 years, and they will accumulate the units.
Unit Linked Insurance Policies offers investors two options, namely, equity, debt, and balanced funds. In an equity fund, you will invest in buying shares of companies; while in debt, you will invest in debt instruments and balanced funds, you will invest equal shares in both equity and debt.
An aggressive investor will select an equity-oriented fund option, and on the other hand, the conservative investor will pick the debt fund option. The returns from the investment will depend upon the concert of the fund chosen by you.