In Unit Linked Plans, the corpus (after deducting the necessary mortality and allocation charges) is invested into the capital markets (both fixed income as well as equity) and the investment risks are borne by the investor.
Single premium plans requiring a single lump sum premium payment at the beginning of the policy term.
Multiple/Regular plans requiring an investor to a predetermined premium at regular intervals.
Upon Maturity, the policy holder receives the value of his investment which is equal to the NAV per unit as on the Maturity Date multiplied by the units held by the policy holder as on that date.
A policy holder can also redeem his units in the ULIP Plan at the current NAV post the expiry of the lock in period.
Option To Top-Up.
In an Unit Linked Insurance Plan, the Investor is given an option to top-up i.e invest an amount over and above the premium payable.