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ULIP Policy

'''ULIP Policy'''

'''ULIP''' stands for the '''Unit Linked Insurance Plan'''. It is one of the financial products that contain the dual advantage of investment and insurance at the same time. When you buy a ULIP policy your premium gets divided into two parts. One part is used for purchasing the insurance cover while the other part is invested in the plan you choose to invest your money in. There are various options for the policy owner to choose from. He can opt amongst equity, debt, or both equity and debt. The ULIP policy makes it possible for the person to have insurance cover and at the same time it ensures the flexibility for investment.

There are many other Life insurance policies that are in a way similar to the ULIP policy but in those policies you do not know the exact amount that would be deducted from your premium towards the insurance cover which is not the case with the ULIP policy and you know the amount that would be diverted from your premium towards the insurance cover.

The ULIP policy owner can also track the growth of the invested funds as the returns he would be getting are linked to the performance of the market. This is not the case with policies other than ULIP policy where you cannot differentiate between the insurance and the savings. In the policies like endowment policies the policy owner has not way to information that how much and where his premium was invested. He does not know that the bonus he receives is from the growth of his funds or if he is receiving the share of the profits made by the company.

Many people who want to keep a watch and control of the funds in their hands prefer the ULIP policy to the other traditional policies. But there are also some risks associated with the policy. When you buy the policy you must read each and every term and condition related to the “'''Minimum Premium Payable'''” to ensure where and how your money will be invested and also you might avoid chances of getting robbed from the insurances agents who are just trying to get maximum business from you.

While buying a ULIP policy always contact your trusted financial advisor to know the pros and cons and about all the claims the advisor selling the product is making to you. The ULIP policy has many benefits if you are investing in it taking into consideration all the risk factors about the stock market and the premium division for insurance cover and investment.