An ULIP is nothing but a Unit Linked Insurance Plan and as the name suggests it has got an insurance component and a growth concept to enhance wealth. Apart from this, investment in ULIPs gives you tax benefit under Sec 80C of the Income Tax Act.

How are ULIPS structured?

These give you savings, insurance and tax saving benefits. The best part is that they come with insurance. In terms of tax, they not only offer you tax benefits under Sec 80C, but, in the event of death of the holder, tax is not levied on the nominee.

You can choose the best Ulip for you in a number of ways. Here's how?

1) Identify your needs first

First, see if you need an ULIP for retirement planning or for health related issues in the future or for your child's education. Since ULIPs invest money in stock markets, if your perspective is rather long-term go for in for one that is equity based.

Unit linked Insurance Plans comes with various options and invest from zero per cent to 100 per cent in equities.

2) Debt Oriented ULIPs

There are such units which invest the entire money in debt. So, this should be the first priority for those planning to retire or for those who are less risk averse or by nature who do not want to take risk.

3) Go For a Balanced Plan

You can also opt for a balanced plan, if you want to end-up being in between high risk and low risk. If you feel that the investment in the scheme should be less than 50% in equity make a choice accordingly.

4) Do Not Buy It For Insurance

Do not Buy ULIPS for the sake of insurance. Remember, the protection may simply not be adequate for the purpose. Go in for a proper term insurance policy, if you wish to cover yourself with insurance. Also, do not use it as a primary means to save tax. Use it to meet a long-term objective like retirement or child education needs.

Here is a list of select ULIPS in India. We are just providing a list and this is by no means a recommendation.

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