Investing in a ULIP plan is a great way to provide financial security for your family against the uncertainties of life and let your savings grow. But how do you know which ULIP is right for you? Read on to know the different types of ULIP plans in India and make the right choice. 


Having a robust life insurance cover is vital for all. At the same time, utilising your surplus income to generate returns through investments is a prudent financial strategy. You can get both life cover and investment opportunity with a single financial product – ULIP or Unit Linked Insurance Plan. 

Over the years, ULIPs have gained immense popularity among retail investors as it offers various benefits. ULIP has also evolved significantly as the insurers are now offering multiple investor-friendly features under their ULIP plan. While there are many choices, not many people realise the importance of choosing the right ULIP to suit your specific investment goal. 

If you are confused about choosing the right ULIP, let us tell you, there are thousands of others who ask themselves the same question. To guide you in the right direction, we list down the different types of ULIPs available in the market. Being aware of the different types will help you make an informed choice. 

Equity-based ULIPs

As the name suggests, this type of ULIP plan primarily invests in high-risk equities and stocks. Although these are the riskiest ULIP, they also have the highest reward potential. If you wish to take an aggressive investment approach and can afford to take risks, you can invest in these plans. As the adage goes, ‘fortune favours the brave,’ if you win, you will win big. 

Balance Funds

Many experts recommend investing in balanced funds; it is an ideal investment for the newbie and first-time investors as the assets are divided into buying units of different funds. It invests in high-risk equities, company stocks, bonds, debt funds, and other fixed-interest instruments that pose a lower risk. 

Guarantee/non-guarantee ULIPs

Some ULIPs offer guaranteed benefits, but these plans usually have very long term. Additionally, these ULIPs have the lowest risk, but the rewards are lesser. On the other hand, the non-guarantee ULIPs offer a wide range of investment options to choose from varying risk levels. Although such a ULIP plan does not guarantee returns, they enable you to choose from a wide range of fund options to invest in. 


Single-Premium / Regular Premium Plans

The premium flexibility is an important factor to consider while choosing the right ULIP. Everyone has a different premium paying capacity. The single premium plans require you to pay the premium for full policy duration in a single payment at the time of buying the plan. The regular premium policies divide the amount throughout the term, and you can pay the premium at regular intervals. Typically, the insurers allow the policyholders to choose the premium payment term. It can be monthly, quarterly, half-yearly, or annually. 

ULIPs for retirement planning

Retirement is inevitable. Everyone must retire at some point. If your primary investment goal is to build a retirement corpus that you can use during the golden years of life and be financially independent, the ULIP plan can come to your rescue. Today, many insurers in India offer specific ULIP plans that are designed for retirement purposes. 

These ULIPs offer regular payment after the plan matures, and you will have a steady stream of income to meet your everyday expenses. But, to enjoy a higher payout, you must start investing in a retirement plan from an early age and give your money a longer time to grow. 

Final Word

Thus, there are many types of ULIP plans that you choose from. But, the key to getting the most out of your investment is to choose the right plan that suits your needs and financial goal.