How to Choose the Best ULIP Fund?

When it comes to choosing one particular ULIP investment, there are several factors that we need to consider. Several types of questions come to mind, including whether to buy a life insurance plan or combo life insurance. Here in this article, we have listed all the types of best ULIP funds along with when it suits the most. Read the article further to know which ULIP investment is best for you. 

What are ULIPs?

ULIP stands for Unit Linked Insurance Plan. A ULIP is a comprehensive life insurance plan that provides both long-term investment and financial protection for your family in the event of an unfortunate event. 

In a ULIP plan, the premium which is paid by the policyholder is further divided into two parts. Some amount of the premium is kept as a life cover. The remaining premium amount is invested in the fund, i.e., either equity, debt or a combination of both. 

Key Advantages of a ULIP Plan

  • Options for Flexibility

The ULIP policy gives policyholders the most flexibility in terms of preferred funds, optional riders, policy tenure, the term for paying a premium, etc. In addition to this, the policyholder, on the basis of their risk appetite, can increase the amount for investment.

  • Liquidity

Unit Linked Insurance Policies also include a partial withdrawal option, which allows you to withdraw a portion of the money invested in your policy after the lock-in period is over. This option allows you to pay in case of an emergency and more. Partial withdrawals are typically free of charge. 

  • Fee Structure Transparency 

The fee structure of ULIP plans is organised. The document states every policy in a clear format. The policyholders will receive quarterly and annual account statements from the insurance service provider. Also, details pertaining to the performance of the fund, daily net asset value, etc., will be shared so that the policyholders can track their policy/investments. 

  • Tax Advantages

The policyholder can save their tax on ULIPs. As per Section 10(10D) of the Income Tax Act, 1961, the maturity benefits and returns obtained on ULIPs are tax-free.

What are the ULIPs in India? Which One is Best for You?

The ULIPs investments are classified into three different categories-

  • Classification by purpose
    • ULIP for retirement, wealth creation and child education 
  • Classification by death benefit- 
    • Type 1 and 2 ULIP plans 
  • Funds of ULIP plan to invest in 
    • Cash Funds 
    • Equity funds 
    • Fixed interest and bond funds 
    • Balanced funds 

What are the Top ULIPs in India? How to Choose the Best ULIP Funds? 

Considering your budget and financial requirements, you can choose the ULIP plan for yourself. Make sure you follow the below-mentioned points while choosing a plan for you. 

  • As previously stated, different ULIP funds contain varying degrees of risk, therefore, it is critical to choose one based on one’s risk tolerance. Follow your instincts and avoid investing in high-risk funds until you are certain of receiving the desired returns.
  • Never forget that a ULIP is, first and foremost, an insurance policy. When purchasing your ULIP, pay close watch on the death benefit. The right unit-linked insurance plan will provide adequate death coverage and will be quite advantageous to you.
  • Make certain that you understand why you want to get the ULIP. Every investment has a goal, whether you want to purchase a house with it or save for your children’s school. You will be able to invest in the appropriate ULIP if you know what your financial milestone is.
  • Because ULIPs are long-term investments, you may use them to plan your retirement. If a comfortable retirement is your goal, consider your plan wisely.
  • One should evaluate the many ULIPs to guarantee you select the best plan. It is really simple to evaluate ULIPs online, and the procedure only takes a few minutes. There are several reputable internet insurance aggregator portals, such as, where this may be done for free. So, carefully examine the ULIPs and select your best policy in a logical and accurate approach.


ULIPs give you an all-around advantage in terms of investing. Unit-linked insurance plans are offered by several companies. These plans allow you to ensure that you meet your financial objectives while also selecting the best plan for your needs. The plans include life insurance to protect you from unforeseeable events.


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