ULIP (Unit Linked Insurance Plan) is a life insurance product, which provides risk cover for the policy holder along with investment options to invest in any number of qualified investments such as stocks, bonds or mutual funds.
Investments made under ULIP’s are subject to risks associated with the capital markets. This investment risk is bared by the policy holder. Thus, you should make your investment choice after considering your risk appetite and needs.
The premiums you pay are invested in the funds chosen by you after deducting allocation charges and charges including managing funds, policy administration and for providing insurance cover are deducted from the funds by cancelling certain units. The value of each unit of a fund is determined by dividing the total value of the fund’s investments by the total number of units.