ULIPs Types: All You Need to Know

Unit Linked Insurance Plan, which is more commonly known by its abbreviation ULIP is a popular investment option for those who want a decent insurance cover along with return benefits. So, instead of investing in an insurance scheme and a mutual fund scheme separately, you can get the benefits of both in a ULIP.

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ULIP Types

Depending on your investment objectives you can invest in any of the following types of ULIPs:

1. Single Premium & Regular Premium
   Depending on your financial status, you can choose to pay the full premium (which can be quite high depending on the scheme) in one go. However, if affordability is a concern, then you can pay the same in several small installments.
2. Guaranteed & Non-Guaranteed
   If you have high-risk tolerance then you can invest in non-guaranteed ULIPs which can offer high returns albeit at a high risk. However, you are free to decide where you want your funds to be invested in.
   If you have a low-risk tolerance, then you can choose to invest in a guaranteed ULIP. In this, returns are small but guaranteed. In other words- you are protected from all kinds of risks.
3. Life Stage Based & Non-Life Stage Based
   Life stage based ULIPs follow a flexible investment approach. As you grow older, the investment risks are reduced in accordance to your changing needs. This is accomplished by changing the ratio of the funds invested in the debt and equity instruments.
4. Special ULIPs
   There are special ULIPs that are catered towards your retirement goals or to meet medical emergencies. For instance, the former ensures that as you reach your retirement it provides regular payouts after the plan’s maturity for a comfortable old age. Similarly, the latter provides a special provision under which you can withdraw a small portion of your maturity corpus during the term to deal with a medical emergency.