ULIP full form is Unit Linked Insurance Plan, which is a multi-faceted life insurance product. A ULIP plan is a combination of life insurance and investment. ULIPs requires you (as a policyholder) to make regular premium payments, part of which is utilised to provide life insurance coverage. The remaining is pooled with the assets received from other policyholders, and then invested in financial instruments (i.e. equity and debt), similar to mutual funds. Let’s know more about what is ULIP and how to invest in them.

In a ULIP (ULIP full form – Unit Linked Insurance Plan), the premium amount that you pay is allocated to the funds chosen by you, after the insurance company has deducted certain charges, including –

1) Fund allocation charges

2) Policy administration charges

3) Fund management charges

4) Mortality Charges

As a long-term financial plan, the meaning of ULIP is to provide ample wealth creation opportunities. On the other hand, the ULIP's meaning, as a life insurance product, is to provide more diversified returns in the form of life insurance protection.

The investments under ULIP plans are managed by dedicated fund managers, appointed by the insurance company. Thus, there is no need to track the investments on your own. If you want, you can track the performance of the individual ULIP fund options and switch between funds (without incurring any additional costs) to maximise the profit and deal with market volatility.