UTI’s ULIP is Different

I have invested Rs 40,000 in UTI’s 10-year ULIP. Should I continue investing in it?
-Mohammed Mubarak

UTI’s ULIP is different from the other ULIPs, in which you invest a fixed amount and you get insurance for a very less amount. UTI’s scheme is predominantly a mutual fund, and 2.25 per cent of your invested money is considered as insurance premium.

We have always advised investors to not mix insurance with investment. But if you consider the UTI ULIP to be a mutual fund, you get free insurance coverage from it because any mutual fund charges around 2.25 per cent as fees. Hence, we would recommend you to continue investing in it if you are satisfied with the scheme’s performance.

This article was originally published on January 20, 2012.