How to Choose the Right ULIP Plan in 5 Easy Steps

24-June-2021 |

 A Unit-Linked Insurance Plan or a ULIP plan is a market-linked financial instrument that offers investors the dual advantages of wealth creation and life insurance protection. It is a popular choice for putting one’s money in as the benefits it can reap are very profitable. Moreover, the added element of life insurance protection makes the ULIP policy a beneficial investment avenue.

While there are several good ULIP plans in India, it is crucial to choose one that gives you maximum returns for a price that doesn’t burn a hole in your pockets.  


1. Choose a ULIP plan with a higher number of fund options.

First and foremost, a ULIP plan should offer a host of diverse fund options. The main purpose of a ULIP plan is to grow your wealth. With a limited number of market-related funds, the chances are that your ULIP performance might not give you sizable returns.

With Tata AIA Life Insurance, you will not have a shortage of fund choices as we have a diverse mix of equity, debt, and money-market funds for you to maximize your gains. You can choose between low, mid, and high-risk fund options as per your risk appetite. The funds offered are the:

  • Multi Cap Fund

  • India Consumption Fund

  • Top 50 Fund

  • Top 200 Fund

  • Super Select Equity Fund

  • Large Cap Equity Fund

  • Whole Life Mid-Cap Equity Fund

  • Whole Life Aggressive Growth Fund

  • Whole Life Stable Growth Fund

  • Whole Life Income Fund

  • Whole Life Short-Term Fixed Income Fund

2. Choose a ULIP plan that is flexible.

A ULIP plan should be flexible enough for you to exercise your choice in allocating your assets and managing your investment portfolio. Tata AIA Life Insurance ULIPs give you the fluidity to switch between funds at your convenience and as per market fluctuations. You can switch between funds up to 12 times in a year at no cost.

You also have the unrestricted freedom to redirect your premium payment from one fund to another fund or a set of funds at no charge. Moreover, if you feel you need more coverage, you have the freedom to make top-up enhancements to your ULIP plan.

3. Check the ULIP policy charges.

There are specific ULIP charges in India that all buyers of ULIP plans must pay from time to time. These charges vary from one insurer to the other but cannot exceed the limit set by the Insurance Regulatory and Development Authority of India. Here is a brief look at the Tata AIA Life ULIP charges in India:

  • Premium allocation charges:

These charges are for allocating the premiums paid by you into fund avenues. They fall between 1% and 6% of the annual premium value charged per year.

  • Fund management charges:

These charges are for managing the funds each year when the ULIP policy is in force and are between 0.65% and 1.20% of each respective fund value.

  • Policy administration charges:

Policy administration charges are for managing the overall ULIP performance every month. They are limited to a maximum of Rs. 500 per month.

  • Fund switching charges:

You can make up to 12 free switches in a year, beyond which you will have to pay between Rs. 100 and 250 per switch.

Some other ULIP plan charges include mortality charges and policy discontinuation charges that are also minimal.

However, there is no partial withdrawal charge or premium redirection charge in the Tata AIA Life ULIPs.

4. Check the type of riders# offered in the ULIP plan.

As ULIP plans also provide life insurance coverage, it is important to check the scope of protection provided in that aspect too. Apart from the value of the sum assured, your ULIP plan should have riders for enhanced financial support in case of unforeseen and debilitating events.

Tata AIA’s ULIP schemes ensure your loved ones financial security is not compromised during tough times through riders# such as:

  • Tata AIA Life Insurance Accidental Death and Dismemberment Rider# (applicable for those up to 70 years of age): This rider pays an extra rider sum assured to your family on your unfortunate demise due to an accident. It also pays a percentage of the rider sum assured in case you suffer from permanent disablement, burns, and loss of physical functions due to an accident.

  • Tata AIA Life Insurance Waiver of Premium Rider# (applicable for those up to 65 years of age): This rider waives off the payment of future premiums in case of permanent disablement due to an accident.

  • Tata AIA Life Insurance Waiver of Premium Plus Rider# (applicable for those up to 70 years of age): This rider is an extension of the previous rider allowing those up to 70 years to benefit from the waiver of premiums in case of permanent disablement due to an accident.


5. Buy the ULIP policy online.


Lastly, always opt for buying the ULIP policy online. As online insurance policies are issued without the help of any intermediaries, it makes you eligible for receiving discounts on premiums and additional benefits. Moreover, the entire process of buying and managing your ULIP policy takes only a few minutes.

The Tata AIA Policy Payment requires only a few essential details from your end to purchase the insurance policy of your choice.


To conclude:

Choosing a ULIP plan should be a well-thought-out decision as once you purchase it, you will be in it for the long term. It is crucial to not rush through the buying process and choose one having the maximum potential for wealth creation. Give importance to your budget but give more importance to the features of the ULIP plan.

Another thing you can do before finalizing a ULIP investment is to check the insurer’s credentials and brand reputation in the industry. Furthermore, it would be wise to remember that there is no ideal time for investing in a ULIP plan because the market does not stop fluctuating. Instead, what you need is to strategize and manage your funds in a lucrative manner.


Need help to choose the right plan?


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  • Insurance cover is available under the product.

  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not a guaranteed issuance plan, and they will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services, and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication; however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.



  • Past performance is not indicative of future performance.

  • All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.

  • Please make your own independent decision after consulting your financial or other professional advisors.

  • #Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders, please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office.