Know More About ULIP And Different Funds It Offer
By SiliconIndia
BANGALORE: The United Linked Insurance policy is known as ULIP. This life insurance policy provides insurance as well as risk coverage. The capital market has a direct influence on the performance of the ULIPs. In a ULIP the investment risk is to be borne by the investor.
The investment returns are not guaranteed from ULIP. Depending on the performance and the chosen funds the policy holder can achieve loss or gain on the investment. The past returns of the fund in no way indicate the performance of the fund.
The following are some of the common types of funds available along with an indication of their risk characteristics.
1. Equity Funds
Investors with a high risk appetite and seeking considerable capital appreciation can invest in these funds.
Nature of Investments: Primarily investment in company stocks with the general aim of capital appreciation
Risk Category: Medium to high
2. Balance Funds
Within the category, investor funds are invested in a mix of fixed interest and equity basket. These funds are hybrid funds which give you adequate exposure to stock market as well as debt instruments.
Nature of Investments: Combining equity investment with fixed interest instrument.
Risk Category: Medium
3. Cash Funds
These funds are also referred as market funds.
Nature of Investments: Known as Money Market Funds – invested in cash, bank deposits and money market instruments
Risk Category: Low
4. Income, Fixed Interest and Bond Funds
Nature of Investments – Invested in corporate bonds, government securities and other fixed income instruments
Risk Category – Medium
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