Growth of Ulip Policies in Life Insurance Sector - A Comparative Study of Traditional and Ulip Policies

Abstract

Unit Linked Insurance Plan (ULIP) provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV).  ULIP came into play in the 1960s and is popular in many countries in the world. ULIPs essentially combine the benefits of an insurance policy and a market-linked investment.

There is a greater flexibility in terms of premium payments which means a premium holiday is possible.  The policy holder can also invest surplus money by way of top ups which will increase his investment in the fund and thereby provide a push to returns as well.  The higher of the sum assured or fund value is paid at the maturity or incase of death. ULIP policies provide the advantages of life protection ,disability, critical illness, ,death due to accident, additional features, investment and savings, capital gains, mortality charges ,flexibility ,adjustable life cover ,investment options, transparency, liquidity, tax planning