Written by : Knowledge Centre Team
2026-03-02
885 Views
6 minutes read
Share
Investments in linked insurance plans such as Unit Linked Insurance Plans (ULIPs) are taking off at breakneck speed. For instance, while the premiums for non-linked insurance products retain a flat rate of growth, those for linked insurance products showed growth at a rate of 35% CAGR for 2013-2014 to 2016-2017. A large contributor to this growth has been a growing awareness among consumers.
If you are one such potential ULIP investor, here are some little-known aspects of ULIPs to help you build further awareness:
What is a ULIP?
A Unit Linked Investment Plan is an insurance-cum-investment tool that offers the dual benefits of an insurance cover as well as investments with a single plan. A part of the premium paid towards your ULIP is spent on a life cover, while the other part is invested in funds selected as per your risk appetite. The selection and management of these funds is done through fund managers appointed by the insurer.
5 Things you probably did not know about ULIPs
Switching between funds free of charge
If you feel like the funds you have chosen are not reaping the ULIP benefits you had expected, you can switch from an equity fund to a debt fund or vice versa. Units can be transferred partially or completely between equity, debt and balanced funds. The switch could be for reducing risk or increasing returns. For new-age online ULIP, you can even avail of the switching facility online. Certain plans permit a predetermined number of free switches that can be carried out over a certain period of time. For instance, some policies allow around 6-7 switches free of charge over the course of a year, while some have done away with the cap entirely.
Your life cover will NOT reduce
It is a common myth that the life cover of a ULIP also declines if the investment component doesn’t fare well. While the returns on your investment could fall if your chosen fund doesn’t perform well, this has no bearing on the insurance component. You will receive the death benefit as initially assured, regardless of fund performance.
Triple Exemptions
It’s a little known fact that ULIPs hold the rare Exempt-Exempt-Exempt (EEE) status. From premiums to the payouts, ULIP enjoy tax benefits. Under Section 80C of the Income Tax Act, the premiums you pay towards the policy are tax-deductible, while under Section 10(10D), the maturity proceeds are exempted. Additionally, while LTCG (Long Term Capital Gains) tax is applicable on most market-linked instruments (like ELSS), ULIPs are tax-free in this regard, largely due to the fact that they are viewed as insurance products and not investment ones. This gives them considerable leverage over other such instruments.
Cap on charges
There are certain costs associated with the workings of a ULIP.
These include:
- fund management charge
- premium allocation charge
- mortality charge
- switching charge
- policy administration charge
- partial withdrawal charge
- discontinuance charge
- miscellaneous charges, etc.
These charges are deducted in the form of units of the fund value, which means that too many charges could bring down your ULIP benefits i.e. your returns. While this may be off-putting for potential investors, a commonly unknown aspect of these charges is that they have a cap. The net reduction in yield (RIY) for policies with a term of 10 years or less cannot be more than 3% at the time of maturity.
Despite this, it always a good practice to make sure you enquire about the number of charges levied and the amounts of these charges before buying a plan.
ULIPs can be safe investments
Conservative investors shy away from opting for ULIPs due to the belief that they are risky market instruments. This is far from the truth. The power to control the risk scale of a ULIP is entirely in your hands. If you want to take a chance at earning greater ULIP benefits at greater risk, you can invest in equity-oriented funds. If you want to play things safe, you can opt for debt-oriented funds. At almost any point, you can redirect your funds as well. Thus, the risk associated with a ULIP totally depends upon your risk appetite.
These are some of the most important things that you take into account before deciding which plan to invest in.
Once you decide to give ULIPs a shot, you can browse through scores of productive ULIPs available online, such as the Promise4Growth Plus plan.
Promise4Growth Plus
Promise4Growth Plus by Canara HSBC life Insurance is a plan that offers a wide range of choices in various aspects. You can pick from a roster of 7 different funds, and apply any of the 4 portfolio strategies to aim for maximum returns. This plan also gives you the option of partially withdrawing your funds in the event of a contingency. Moreover, there are Loyalty Additions, Wealth Boosters, and Return of Mortality Charges options to boost your investment even further.
Get a Personalised ULIP Plan for Wealth Creation & Protection
Enter OTP
An OTP has been sent to your mobile number
Didn’t receive OTP?
Application Status
Name
Date of Birth
Plan Name
Status
Unclaimed Amount of the Policyholder as on
Name of the policy holder
Policy No.
Address of the Policyholder as per records
Unclaimed Amount
Sorry ! No records Found
Request Registered
Thank You for submitting the response, will get back with you.
Thank you for your interest in our product. Our financial expert will connect with you shortly to help you choose the best plan.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
Recent Blogs
Is ULIP a Good Investment for Short-Term Gains?
09 July '26
2201 Views
7 minute read
Discover whether ULIPs are suitable for short-term investment goals and understand the risks, returns and lock-in period.
Read More
Ulip
When Is the Right Time to Invest in ULIPs?
29 June '26
896 Views
8 minute read
When is the right time to invest in ULIP? Learn how timing, goals, and market conditions impact returns and why starting early can maximise long-term benefits.
Read More
Ulip
How Do Top-Ups Work in ULIPs? Benefits & Key Considerations
29 June '26
899 Views
6 minute read
What is a top-up premium in ULIP? Learn how ULIP top-ups work, their benefits, and how additional investments can help boost long-term returns.
Read More
Ulip
Professional vs. Retail Investors: How Do They Structure Their Portfolios Differently?
29 June '26
134 Views
4 minute read
Discover how retail and professional investors differ in strategy, risk, and portfolio structure. Learn which approach suits your investment goals.
Read More
Ulip
ULIP Tax Benefits Explained: Save Tax Under 80C
29 June '26
2768 Views
10 minute read
Find out why ULIPs are an excellent way to save money on taxes. Gain tax advantages, market-linked returns, and life insurance while accumulating long-term wealth.
Read More
Ulip
Best Retirement Plan at 30s & 40s: How to Start Early
29 June '26
2761 Views
10 minute read
Learn how to plan for retirement at 30 or 40. Explore the best retirement plans, investment strategies, and tips to secure long-term financial stability.
Read More
Ulip
ULIP Structure Explained: Funds, Charges & How It Works
29 June '26
2769 Views
10 minute read
Comprehend the structure of a ULIP. Find out about charges, fund options, life insurance, premium allocation, and how ULIPs integrate investment and insurance.
Read More
Ulip
GST on ULIP: Rates, Charges & Impact on Premiums
29 June '26
3681 Views
7 minute read
Understand how GST applies to ULIP charges, premiums, and withdrawals. Simple explanation for policyholders to know what they pay and why it matters.
Read More
Ulip
Best ULIP Plans: How to Choose the Right Plan for You?
25 June '26
1080 Views
7 minute read
Choosing the right ULIP plan can make a significant difference to your returns. A clear breakdown of top tips to pick the best ULIP plan for your goals.
Read More
Ulip
Unit Linked Insurance Plans - Top Selling Plans
Canara HSBC Life Insurance offers online ULIP plans that blend life insurance protection with investment growth, helping you build wealth while securing your family's future.
Wealth Today, Protection Always
Promise4Growth Plus
- Life Cover up to 100 Years
- 13 Fund Options
- Fund Switching Option
- Waiver Of Premium
Secure Your Future with Confidence
SecureInvest
- Life Cover up to 100× Annual Premium
- 12 Fund Choices
- Automated Portfolio Strategies
- Maturity Booster
Invest Smart, Live Smart
Wealth Edge:
- Flexible Premium Options
- Multiple Fund Allocations
- Systematic Withdrawals
- Premium Waiver Benefit
Popular Search
- What is ULIP?
- ULIP Tax Benefit
- ULIP Full Form
- ULIP Vs Term Insurance
- Best ULIP Plans
- Best ULIP Plan For Child
- Allocation Charges In ULIP
- ULIP Returns In 15 Years
- Difference Between ULIP and Mutual Fund
- ULIP Vs SIP
- Mortality Charges In ULIP
- What is NAV?
- How ULIP Works?
- Tips to Buy ULIPs
- ULIP Calculator
- Power of Compounding Calculator
- ULIP Tax Benefits in India