A unit-linked insurance plan (ULIP) is a type of life insurance where the cash value of a policy varies according to the current net asset value of the underlying investment assets. It allows protection and flexibility in investment, which are not present in other types of life insurance such as whole life policies. The premium paid is used to purchase units in investment assets chosen by the policyholder.
In India investments in ULIP are covered under Section 80C of IT Act. However, the concept of having an investment is governed by the Insurance Regulatory and Development Authority (IRDA).
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