Updated: July 9, 2025 by Michael Kahn. Published: July 2, 2025.
The digital era has transformed many aspects, including the way we make purchases. Not only shopping and transactions, but even life insurance products and investment tools have undergone digitisation. With a few clicks, you can now purchase or benefit from various life insurance products.
One among these is the ULIP. Smart entrepreneurs also seek effective financial tools that offer both flexibility and returns. That’s what ULIPs are all about. Unit-linked insurance plans have become popular as they offer a unique combination of both life insurance and investment.
In this guide, we will explore reasons why ULIPs have become a popular choice among digital entrepreneurs. Read on to learn What is ULIP and how it can benefit you.
What are ULIPs?
A blend of life insurance and investment sounds like an ideal financial plan. That’s what ULIP offers. ULIPs or unit-linked insurance plans come with a lock-in period of 5 years. Although you may withdraw after 5 years, it is generally advisable to stay invested for 10-15 years for optimal returns.
In ULIPs, the insurance company uses a part of the premium to provide life insurance coverage. The remaining premium amount is used to invest in funds like equity, debt, or hybrid funds. Over time, these funds can offer good returns based on the market conditions. With ULIPs, you get life insurance coverage on one hand and investment opportunities on the other.
ULIPs and Digital Entrepreneurs: Reasons to Buy Online
One question that may come to mind is why ULIPs are popular among digital entrepreneurs. Well, there are several reasons behind it. Here we have discussed some of the benefits of purchasing ULIPs online:
- Convenience
First and foremost, digital services are quite convenient. You need not step out or leave your comfort zone. From anywhere and at any time, you can purchase the policy.
- Paperless Process
The online process of purchasing ULIPs involves minimal to no paperwork. Hence, it not only increases the speed but is also hassle-free.
- No Middlemen
Online purchase of a policy means no involvement of middlemen. So, you can make decisions without any biases. It also reduces the scope of fraud committed by unlicensed agents.
- Real-time Update
You can get real-time and quick updates about the policy. Whether you want to check your investment or know about the policy status, the process is convenient.
- Low Charges
In some cases, online purchases of ULIPs can be more cost-effective. Not only this, but it also saves you from travel and related expenses.
Benefits and Features of ULIPs
Some of the highlighting features of unit-linked insurance plans that make it unique are:
- Combo Benefit
Unit-linked insurance plans are 3-in-1 benefit plans that include investment, insurance, and tax benefits. These are:
- Tax Benefits
Section 80C of the Income Tax Act, 1961, provides tax benefits against premiums paid for Unit Linked Insurance Plans (ULIPs) up to ₹1.5 lakh. Additionally, Section 10(10D) of the Income Tax Act, 1961, exempts death benefits from tax liabilities.
- Investment
As discussed above, ULIPs also allow you to invest a certain amount in market-linked funds. You may choose how you want to invest in ULIP, like equity, debt, or hybrid funds.
- Life Insurance
The basic purpose of ULIP is life insurance. Hence, it also offers life insurance to the life assured. Upon the death of the life assured during the policy tenure, the nominee receives a death benefit.
- Market-linked Returns
The investment is done in market-linked funds. Hence, the returns can be quite rewarding. 10-15 years of investment in ULIPs is generally considered a good tenure, as this can offer good returns. ULIPs usually offer positive returns. However, since these are market-linked returns, no guarantees are provided.
- Fund Switching
You are not obligated to remain with a fund throughout your ULIP tenure. You may switch funds as needed. Some insurers may charge for fund switching, while some may permit free switches.
- Quick Updates
With online facilities, you can get quick updates about your investment from anywhere and at any time. All you need is an internet connection and a screen.
- Partial Withdrawals & Lock-in Period
ULIPs have a lock-in period of 5 years. After this, you may opt for partial withdrawal. It is permitted under certain circumstances.
- Option of Add-ons
ULIPs also offer life insurance coverage. Some insurance companies may also offer add-ons in addition to the base coverage. You may choose add-ons as per your preferences and needs.
Conclusion
Purchasing life insurance or investing has become quite easy and quick in today’s time. Thanks to high-speed internet and rapid digitisation, this is possible. All you need is a few clicks, and you have your insurance purchased. As a digital entrepreneur who prefers digital services, you no longer have to leave your comfort zone for investment or life insurance products. Everything is now available at your fingertips.
So, start planning your investment journey without any hassle and in your comfort. With unit-linked insurance plans, you have the flexibility of both investment and life insurance in one policy!
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Whether she is researching the latest trends in home decor, life-changing destination getaways, or the best way to maintain your finances, Dewey takes pride in leaving no stone unturned. She is passionate about distilling and delivering high-quality information that you can use to upgrade your life.
