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Unit-Linked Insurance Plan

A unit-linked insurance plan (ULIP) is a type of life insurance where the cash value of the policy varies based on the net asset value of the underlying investment assets chosen by the policyholder. ULIPs first emerged in the 1960s and are now popular worldwide as they provide both insurance protection and flexibility in investment. While ULIPs offer solutions for insurance planning, financial needs, and retirement planning, their structure as both an investment and insurance product was challenged in India before being ruled to be governed by insurance regulators.

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39 views1 page

Unit-Linked Insurance Plan

A unit-linked insurance plan (ULIP) is a type of life insurance where the cash value of the policy varies based on the net asset value of the underlying investment assets chosen by the policyholder. ULIPs first emerged in the 1960s and are now popular worldwide as they provide both insurance protection and flexibility in investment. While ULIPs offer solutions for insurance planning, financial needs, and retirement planning, their structure as both an investment and insurance product was challenged in India before being ruled to be governed by insurance regulators.

Uploaded by

Pavithra Reddy
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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UNIT-LINKED INSURANCE PLAN

A unit-linked insurance plan (ULIP) is a type of life insurance where the cash value of a
policy varies according to the current net asset value of the underlying investment assets. It
allows protection and flexibility in investment, which are not present in other types of life
insurance such as whole life policies. The premium paid is used to purchase units in
investment assets chosen by the policyholder.

ULIP came into play in the 1960s and is popular in many countries in the world.

As times progressed the plans were also successfully mapped along with life insurance need
to retirement planning. In today's times, ULIP provides solutions for insurance planning,
financial needs, and many types of financial planning including children’s marriage planning.

In India investments in ULIP are covered under Section 80C of IT Act. However, the concept
of having an investment and insurance by the same instrument was challenged by the market
regulator SEBI which took up the matter to the Supreme Court of India .The Indian
government brought down curtains on the two-month long tussle between the regulators by
ruling that Unit-linked Insurance Products (Ulips) will be governed by the Insurance
Regulatory and Development Authority (IRDA).[1]

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