ULIP - Unit Linked Insurance Plans:

• High Loads (Ranging from 4% to 60%, ULIP companies will charge you around 20%-60%, depending on the company, in the first year and less in the subsequent years).
• We can claim tax reduction on the amount invested subject to the laws (currently upto 1 Lakh under 80C).
• Capital is protected as it is the insurance policy.
• Risk is medium as the amount invested is safe, we may get the additional return based on the performance of the fund.
• Amount is locked for atleast 3 years to 5 years and we will be charged upto 100% of the amount if we exit.
• Flexibility in changing the funds, balanced, debt etc (they allow you to change the amount between funds upto some number of times) .

• Low entry loads of 1% to 2.25% and/or the low fund maintenance costs of no more than 6% (according to the SEBI rules).
• High risk in the equity oriented funds and at the same time high returns are possible depending on the market conditions.
• Amount is locked for 3 years.
• We cannot move our money to other funds even with the same AMC as the amount is locked .
• We can check the portfolio of the funds regularly and keep updated with the growth of the fund.
• We can save tax with some tax saver funds but the returns are not as high as the other mutual funds.