Why ULIPs Are Gaining Attention as Markets Turn Volatile

Mumbai, India : A Unit Linked Insurance Plan
(ULIP) is a financial instrument that strategically combines essential life
insurance coverage with market-linked investment growth in a single policy.
During periods marked by frequent and rapid changes in financial markets, ULIPs
from platforms like Tata AIA have demonstrated notable growth. These plans
offer policyholders life cover to secure their future, coupled with the handy
feature to adjust their investment allocation. This dual capacity assists
individuals in managing market risk while continuing to pursue long-term wealth
accumulation goals.

What is
a ULIP?

A ULIP is a type of life insurance plan that
combines two benefits into one simple product.

·      
A portion of the funds you pay goes toward
providing life insurance cover. This means your family is financially secure if
something happens to you.

·      
The rest of your funds are invested in different
market-linked funds.

Conceptually, a ULIP functions as a composite
mechanism: it provides immediate protection (the life cover) while
simultaneously offering an opportunity for long-term capital appreciation (the
investment component). The Tata AIA ULIP
plan represents one method of obtaining this combination of protection and
investment in a unified structure.

How a
ULIP works

The utilisation
of funds within a ULIP is systematic. When a premium payment is made, the capital
is allocated into two components:

·      
Life insurance component: A
portion of the premium is directed toward the life cover. Should the
policyholder pass away, the designated beneficiary receives the death benefit.
This constitutes the fundamental protection element of the plan.

·      
Investment component: The
residual amount is invested according to the fund selections made by the
policyholder. This component is dedicated to pursuing wealth creation over the
long term.

Investors
select funds based on their tolerance for risk. Four principal types of fund
options are generally available:

·      
Equity funds: These funds primarily
invest in company stocks. They are structured to aim for higher potential
returns but inherently carry higher risk.

·      
Income, fixed interest, and bond funds:
Investments are placed in instruments such as government securities and
corporate bonds. They target stable returns with an associated medium level of
risk.

·      
Cash funds: These allocate capital
to bank deposits and short-term instruments. They are characterised by a lower
risk profile and tend to provide stable returns.

·      
Hybrid/balanced funds: This
fund type integrates both stocks (equity) and bonds (debt). Their objective is
to achieve a balance between potential capital growth and overall risk
mitigation.

You can use a ULIP
calculator to estimate potential returns and choose the
right fund strategy for your goals.

Types
of ULIP plans based on goals

ULIPs are versatile
instruments suitable for a range of financial objectives throughout an
individual’s life cycle.

Why
ULIPs are gaining attention during market changes

The
increased volatility and rapid shifts observed in financial markets motivate
many investors to seek stability and managed growth.

·      
Layer of Security: The
life insurance component provides a fixed benefit that remains secure. This
foundational protection feature is a significant advantage, particularly during
market instability.

·      
Simplified Risk Management: In
times of market fluctuation, policyholders have the ability to reallocate
capital from higher-risk equity funds to lower-risk debt funds or hybrid funds.
This mechanism, known as switching, is a functional tool for attempting to
mitigate potential losses or safeguard realised gains.

·      
Expert Management:
Policyholders are relieved from the obligation of constantly tracking market
changes personally. Expert fund managers oversee investment decisions, thereby
reducing the day-to-day pressure and stress associated with market volatility.

ULIPs offer strategic integration of growth
potential, family security, and tax advantages, positioning them as a highly
regarded option for long-term financial planning.

About
Tata AIA Life Insurance

Tata AIA Life Insurance Company Limited
is a joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd., combining
the trust of the Tata brand with AIA’s global expertise in insurance. The
company provides a wide range of life insurance solutions, covering protection,
savings, retirement, and health needs of individuals and families. With a
strong claim settlement record, innovative digital platforms, and a
customer-first approach, Tata AIA ensures convenience, reliability, and
financial security. Today, it continues to be a trusted partner for millions of
Indians in their long-term financial and protection journey.  

Disclaimer:

·       Tata AIA Maha Raksha Supreme Select –
Non-Linked, Non-Participating, Pure Risk, Individual Life Insurance Product
(UIN: 110N171V12)

·       1Illustrated Premium is the monthly premium
excluding taxes for 20 yr. old female, Standard Life, Non-Smoker for 2 Cr. Sum
Assured with Policy Term of 20 yrs. (Regular Pay) with Life Secure plan option
salaried person. Please refer Benefit Illustration for more details. Tata AIA
Life shall have the right to claim, deduct, adjust, recover the amount of any
applicable tax or imposition, levied by any statutory or administrative body,
from the benefits payable under the Policy. Kindly refer the sales illustration
for the exact premium.

·       2Tax benefits of up to ₹46,800 u/s 80C is
calculated at highest tax slab rate of 31.20% (including cess excluding
surcharge) on life insurance premium paid of ₹1,50,000 as per old tax regime.
Tax benefits under the policy are subject to conditions laid under Section 80C,
80D,10(10D), 115BAC and other applicable provisions of the Income Tax Act,1961.
Good and Service tax and Cess if any will be charged extra as per prevailing
rates. The Tax Free income is subject to conditions specified under section
10(10D) and other applicable provisions of the Income Tax Act,1961. Tax laws
are subject to amendments made thereto from time to time. Please consult your
tax advisor for details, before acting on above.

·       3Tata AIA Maha Raksha Supreme Select offers
Premium discount of 1% of single premium and 8.5% on first year premiums for
regular and limited pay to the salaried customers & digital discount of 1%
for Single Pay, 10% for Limited Pay/Regular Pay.

·       4Tata AIA Maha Raksha Supreme Select offers
Premium discount of 1% of single premium and 8.5% on first year premiums for
regular and limited pay to the salaried customers.

·       5With this feature, instant death benefit of
INR 3 Lacs from the Sum Assured will be paid within 1 working day from the
claim registration date. This feature is applicable only after a waiting period
of 3 policy years from the policy inception or revival of the policy and
provided the policy is in force. The remaining SA shall be payable post the
completion of the claim investigation. Further, in case of any discrepancy in
the claim investigation resulting in the final decision of non-payment of the
claim, the company reserves the right to recover the already paid amount. The
acceleration of instant claim should not be construed/interpreted as acceptance
of the claim. | On assessment of documents submitted during claim assessment,
additional documents may be sought by the company. | Please refer the sales
brochure and policy document for more details

·       6With this feature, policyholder is allowed
to defer the due premium for a period of 12 months while maintaining the full
risk cover under the base plan and attached riders. At the end of Premium
Deferment period, the policyholder is required to pay the due premiums,
including the premium applicable for the period of Premium Deferment, i.e., the
base cover premium and additional premium (if any). | FlexiPay Benefit shall be
available for multiple times with a gap of 5 policy years from the expiry date
of previous Premium Deferment. The option can be exercised only after payment
of 5 full years premium. | No interest shall be levied on the premium due
during the Premium Deferment period. If the premiums due are not paid within
the grace period after expiry of the FlexiPay Benefit, the Policy (including
Rider(s), if any) shall lapse and no benefits shall be payable in the Policy or
the Rider(s), if any) and company shall be entitled to recover the same from
any amounts or benefits payable under the Policy or Rider(s). | Please refer
the sales brochure and policy document for more details.

·       7The product offers first year discount of 2%
for Limited Pay/Regular Pay and 1% for Single Pay under Nominee & family
discount to existing TATA AIA customers

·       8If Return of Balance Premium option is
chosen with any of the benefit option/s, an amount equal to the Total Premiums
Paid (excluding loading for modal premiums) towards the benefit option, less
any claim amount already paid out under the respective benefit option, shall be
payable at the end of the benefit option term, provided the benefit option is
not terminated.

·       9Riders are not mandatory and are available
for a nominal extra cost. For more details on benefits, premiums, and
exclusions under the Rider, please contact Tata AIA Life’s Insurance
Advisor/Intermediary/ branch.

·       10Our Individual Death Claim Settlement Ratio
is 99.41% for FY 2023 – 24 as per the latest annual audited figures

·       11Tata AIA Vitality – A Wellness Program that
offers you an upfront discount at policy inception. You can also earn premium
discount / cover booster (as applicable) for subsequent years on policy
anniversary basis your Vitality Status (tracked on Vitality app) Please refer
rider brochures for additional details on health and wellness benefits.

·       12On enrolling into the Wellness Program, you
get an upfront discount of 5% on 1st year premium for Accidental Death,
Accidental Total & Permanent Disability, Accidental Disability Care
Benefits and of 10% on 1st year premium for Term Booster, CritiCare Plus,
Accelerated CritiCare, Multistage CritiCare, Cancer Care, Cardiac Care. The
rewards are offered on cumulative basis and in any year, the maximum rewards in
view of both the Up-front Rewards and Annual Rewards Flex together shall be 15%
for Accidental Death, Accidental Total & Permanent Disability, Accidental
Disability Care and 30% for all other rider benefit options. Discount is driven
by accumulated points which is achieved through wellness status. Please refer
policy document for more details.

·       13Income Tax benefits would be available as
per the prevailing income tax laws, subject to fulfillment of conditions
stipulated therein. Income Tax laws are subject to change from time to time.
Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax
implication mentioned anywhere in this document. Please consult your own tax
consultant to know the tax benefits available to you.

·       Tata AIA Life Insurance Non-Linked
Comprehensive Protection Rider (UIN:110B033V04 or any other later version) – A
Non-Linked, Non- Participating Individual Health Rider, Tata AIA Vitality
Protect (A Non-Linked, Non- Participating Individual Health rider
(UIN:110B046V04 any other later version), Tata AIA Vitality Health (A
Non-Linked, Non- Participating Individual Health rider (UIN:110B045V03 any
other later version) are available under this plan.

·       Vitality is a trademark licensed to Tata AIA
Life by Amplify Health Assets PTE. Limited, a joint venture between Vitality
Group International, INC. and AIA Company Limited. The assessment under the
wellness program shall not be considered as a medical advice or a substitute to
a consultation/treatment by a professional medical practitioner.

·       Insurance cover is available under this
product.

·       This product is underwritten by Tata AIA Life
Insurance Company Limited. This plan is not a guaranteed issuance plan, and it
will be subject to Company’s underwriting and acceptance.

·       Buying a Life Insurance policy is a long-term
commitment. An early termination of the policy usually involves high costs, and
the Surrender Value payable may be less than all the Premiums Paid.

·       In case of sub-standard lives, extra premiums
will be charged as per our underwriting guidelines.

·       For more details on risk factors, terms and
conditions please read Sales Brochure carefully before concluding a sale.

·       All Premiums, Charges, and interest payable
under the policy are exclusive of applicable taxes, duties, surcharge, cesses,
or levies which will be entirely borne/ paid by the Policyholder, in addition
to the payment of such Premium, charges or interest. Tata AIA Life shall have
the right to claim, deduct, adjust, and recover the amount of any applicable
tax or imposition, levied by any statutory or administrative body, from the
benefits payable under the Policy.

·       L&C/Advt/2025/June/Aug/3110

·       No Goods and Service Tax shall be applicable
on Individual life insurance products as per prevailing laws. Tax laws are
subject to amendments from time to time. If any imposition (tax or otherwise)
is levied by any statutory or administrative body under the Policy, Tata AIA
Life Insurance Company Limited reserves the right to claim the same from the
Policyholder.