Comparative Study on ULIPS in Indian Insurance Market


The introduction of Unit Linked Insurance Plans (ULIPs) may have been the single most significant innovation in the life insurance industry. It has addressed and resolved many of the problems and concerns that clients had regarding life insurance, including liquidity, flexibility, and openness. These advantages are attainable because ULIPs are differently structured products that offer the policyholder a variety of options. They are designed in such a way that the protection (insurance) and savings (investment) elements may be distinguished and so managed according to one’s individual needs, providing flexibility and transparency. As a result, we can conclude that it is a product that caters to a variety of requirements. There were two developments that allowed ULIPs to enter the insurance market: first, the advent of private players, with ULIPs being their most significant innovation, and second, the fall of guaranteed returns in endowment plans. Aside from that, the stock markets were rising, which has now become the most important aspect. As previously stated, increased flexibility and the consolidation of investing and insurance into a single company have endeared them to individuals. Birla Sun was the first to enter the ULIP market; they were the first to conquer the market in this industry. These are the insurance plans that are linked to Mutual Fund Units. A portion of the premium earned in this policy is invested, while the remainder is used for insurance coverage. In terms of form and operation, ULIPs are strikingly similar to mutual funds: premium payments are transformed into units, and the net asset value (NAV) is disclosed on a regular basis. Investors have the option of selecting a fund based on their risk tolerance. 

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