Launched by the Unit Trust of India in 1971, the unit linked insurance policy (ULIP)
offers both savings and protection for the policy holder.
Essentially, of the amount you invest in such a plan, a portion goes to providing
you life cover, working in the same way as a
life insurance policy
. The remaining amount is invested in funds, which
in turn invest in bonds or stocks, offering the policyholder wealth creation opportunities.
With the Indian government opening up the insurance industry to foreign investment
since 2001 and with fresh guidelines put forth by the IRDA in 2005, a plethora of
choices have opened up for the consumer.