Types of Unit Linked Insurance Plans

The Unit Linked Insurance Plan or ULIP is an incredible choice that incorporates both insurance & investment terms for an individual. Some portion of the invested amount in ULIP covers the insurance premium and provides insurance to the individual. In contrast, some premium amounts go towards investment in the financial market.

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There are several types of Unit Linked Insurance Plans or Unit Linked Insurance Products. Let's discuss it below. 

Types of Unit Link Insurance Plans

  1. Equity

    In this type of Unit Linked Insurance Plan, the amount you invest is utilized towards buying equity shares of different companies. Therefore, this Unit Link Insurance Product is considered risky as the investments are linked to fluctuations in the financial market. Nevertheless, there is also a high possibility for growth in this kind of ULIP. Therefore, equity is an ideal ULIP for risk-friendly investors who expect high returns.

  2. Liquid funds

    A liquid fund is a perfect type of Unit Linked Insurance Plan for those with low-risk tolerance. Liquid funds meet the short-term goal of investors as the maturity period of this Unit Link Insurance product varies from weeks to a few months. On top of that, it is believed to be strong credit ratings which further make it a low-risk investment for investors. The funds in this ULIP are invested in money markets such as call money, treasury bills, or certificate of deposit (CD).

  3. Debt

    The funds in this type of Unit Linked Insurance Plan go into debt instruments such as government bonds, debentures, securities, fixed-income bonds, corporate bonds, etc. Debt ULIP involves medium to low risk, and the investor gets moderate returns. 

  4. Balanced Funds

    In order to lower the risk and increase the returns, some Unit Link Insurance Products invest in both equity and debt instrument. These investments are divided into two proportions. The first goes to equity, and the another gets invested in debt instruments. Although, the risk involved in this type of Unit Linked Insurance Plan is lower than the pure equity plan. 

  5. Guaranteed & Non-Guarantee Plans

    Under a guaranteed type of Unit Linked Insurance Plan, the investor enjoys a better return over long-term investments. If the purpose of the investor is saving, then guaranteed ULIP would be an ideal choice as the policyholder gets negligible exposure to equity funds.

    Under Non-Guarantee Unit Link Insurance Products, investors get better exposure to equity funds. As a result, the investor has a high probability of growth if the investor's primary goal is to create wealth. In addition, a range of funds options is available for the investor to choose from. 

  6. Single and Regular premium

    Under the single premium type of Unit Linked Insurance Plan, the investor must pay the premium only once while purchasing the Unit Link Insurance Product. 

    On the other hand, the investor must frequently pay premium charges based on the regular type of Unit Linked Insurance Plan. The investor may choose a monthly, quarterly, or annual plan to pay the premium. 

  7. Cash Funds

    This type of Unit Linked Insurance Plan is ideal for risk-averse individuals. The risk factor is insignificant in this type of ULIP. However, the returns are also the lowest among other Unit Link Insurance products.

  8. Life-staged ULIPs

    Under this type of Unit Linked Insurance Plan, the risk factor of the investor decreases as they grow older. At the initial stage, a high proportion of investment goes into equity, and the minimum portion goes into debt. As the investor ages, more investments go into debt instruments and less carries equity. 


The categories of Unit Link Insurance Products show how you can determine a particular type of Unit Linked Insurance Plan based on your risk appetite and financial planning. For example, you can opt for a risky one and go for equity funds or debt in order to reduce the risk. At the same time, various other alternatives are also available.


  • What is ULIP?

    ULIP or Unit Linked Insurance Plan combines a life insurance policy and investment. Therefore, the beneficiary or the policyholder gets benefits from one investment. 
  • What benefits will I get on the maturity of the Unit link insurance product?

    On the maturity of the ULIP, you will get the value of your fund unit along with the other bonuses and loyalty benefits. 
  • Can I get my money refunded in case of non-satisfaction with the policy?

    Suppose a policyholder is unsatisfied or disagrees with the terms and conditions mentioned in the policy, he may seek a refund of his investment within 15 days of receiving the receipt of the policy. 
    It is provided that the money will be refunded after making some deductions, such as medical examination, stamp duty, and cancellation charges which are bound to be deducted.
  • Can I surrender or give up a policy if I cannot pay the premium?

    As per the provisions mentioned by IRDAI, you may discontinue giving premium charges after paying the specific fees thereof. In other words, you are bound to pay certain charges to surrender any type of Unit Linked Insurance Plan.

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