Life Insurance
Understanding Life Insurance: Term vs ULIP
Compare different types of life insurance and find out which one suits your needs.
Life insurance plugs the biggest financial risk—loss of income. Pure term plans create a safety net for dependents while ULIPs nurture wealth for long-term goals such as education or retirement. Blending them allows you to balance protection with disciplined investing.
Before buying, list your liabilities, future milestones, and existing assets. Use this to estimate the ideal sum assured and investment horizon. Review policies every few years to adjust for inflation and lifestyle upgrades so that your coverage remains relevant.
Purpose & Protection
Term Insurance:
Pure protection with high sum assured and low premium. Ideal for income replacement.
ULIP:
Combines life cover with market-linked investments. Suitable for long-term wealth creation goals.
Premiums & Costs
Term Insurance:
Lower premiums. No fund management charges or surrender penalties.
ULIP:
Premium split between life cover and investment. Includes fund management, allocation, and surrender charges.
Returns
Term Insurance:
No maturity value. Family receives sum assured on death.
ULIP:
Market-linked returns depending on chosen funds (equity/debt/hybrid).
Flexibility
Term Insurance:
Add riders for critical illness, accidental death, waiver of premium.
ULIP:
Switch funds, top-up premiums, partial withdrawals after lock-in.
How to Decide?
Benefits of Life Insurance
- Immediate financial protection for family liabilities and lifestyle expenses.
- Optional riders cover critical illness, disability, and accidental benefits at minimal cost.
- ULIPs help build long-term wealth while ensuring a default life cover.
- Potential tax-free maturity under Section 10(10D) if premium limits are followed.
- Cover liabilities and income replacement with term insurance first.
- Use ULIPs for long-term goals (10+ years) where you want insurance + market participation.
- Review yearly to adjust sum assured, riders, and fund choices.
Need help structuring your life insurance portfolio?