An early adopter for unit-linked insurance plan was launched by Unit Trust of India.
The aggregate premiums collected by the insurance company providing such plans is pooled and invested in varying proportions of debt and equity securities in a similar manner to mutual funds.
The net asset value varies from one plan to another based on market conditions and fund performance.
Policy holders can make use of features such as top-up facilities, switching between various funds during the tenure of the policy, reduce or increase the level of protection, options to surrender, additional riders to enhance coverage and returns as well as tax benefits.
Again, all this is based on the type of plan chosen for investment and the investor preference and risk appetite.
[6] If you meet the minimum and maximum age requirements specified in the policy, you are eligible to invest in child ULIP plans.
If this condition is not met, the benefit under Section 80C shall be capped at 10% of Sum Assured while the maturity proceeds will not be exempt from income tax.