Glossary

ULIP

Also called unit linked insurance plan.

A unit-linked insurance plan. Part of the premium buys cover, the rest is invested in funds you choose.

A unit-linked insurance plan splits your premium between life cover and investment funds that you select. The investment side moves with the market, and you carry that risk entirely.

Every unit-linked product has a five-year lock-in: no surrender and no withdrawal, full or partial, until the fifth year ends. That is a regulatory feature of the product type rather than a term set by any one insurer, and it is the single most important thing to understand before buying one.

Related terms

  • Fund value The current worth of the units held under a unit-linked policy.
  • NAV Net asset value — the per-unit price of a fund, published regularly.
  • Lock-in period The five years during which a unit-linked policy allows no withdrawal or surrender.
  • Switching Moving money between funds within a unit-linked policy.

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