ULIP refers to Unit Insurance Plan, is the life insurance product, which offer risk cover for policy holder and investment options to invest in anyone including bonds, stocks, or mutual funds, which provide flexibility and transparency. Triple Tax benefits structure is also applicable initially income tax is saved under section 80C of income tax act upto Rs 1.5 lacs. The final amount of maturity is tac free under section 10 (10D). The income tax is free for self or nominee. The whole investment amount does nor bear any service tax other than mortality change.

ULIP is a combination of insurance as well as investment. The working principle is that a part of the premium paid is utilized to provide insurance cover to the policy holder the remaining portion is invested in various equity and debt schemes. Invested funds continue to earn market linked returns.

Since ULIP returns are directly linked to market performance, the risk in investment portfolio is entirely borne by the policy holder. So it is up the investor to understand the risk involved before deciding to invest in ULIPs.