ULIPs do not invest only in equities. Here’s why


ULIPs do not invest only in equities. Here’s why: If you thought that ULIPs are risky because they only invest in equity funds, here’s a fact-check. ULIPs investment in a variety of instruments and you even get to choose the proportionate division among different instruments.


A Unit Linked Insurance plan performs the dual functions of protection with insurance, and wealth creation through investment in the long run. A ULIP scheme diverts your premium into two components: a portion pays for the insurance premium, and the rest is placed as an investment in the market. This latter component brings a wide array of choices in terms of investment avenues. You can choose to invest the amount in equity funds, debt/bonds, or a balanced fund, which is essentially a combination of both.

Busting the myth of ‘solely equity investment’

The myth of ULIPs being restricted to equity investments dissuades potential investors or policyholders from opting for  ULIP product, especially when they are risk-averse. They consider the stock market to be highly volatile and by extension, ULIPs to be high-risk tools.

It is understandable why there exist barrels of confusion about ULIPs investing in equities.

After all, the investment component in this financial product exists for wealth creation in the long run, so it must be invested in a way that maximised returns. How else can return be maximised except by maximising the risk? While this logic is sound, it is far removed from the truth. In reality, ULIPs allow you to spread your portfolio across multiple funds, and the choice is completely yours, aided by the expert guidance of your fund manager.

Investment stations are your discretion

Future Generali offers a variety of ULIP fund options to suit your risk appetite. These funds essentially carry varying levels of risk, and you can choose the one that matches your risk profile.

For example, equities are subject to market risks and fluctuations, but can also reap higher returns, so you’d opt for a fund dominated by equities if you are keen on capital appreciation through risk-bearing.

However, if you want to invest conservatively, you’d go for fixed income securities and bond funds. Future Generali ULIP also offers the option of cash funds, money market funds that give you a specific amount of returns upon maturity. And then there’s the stable option of medium-risk balanced funds.

Here are the six fund options provided by Future Generali ULIP, from among which you can choose to invest in accordance with your risk appetite.

  1. Future Income Funds: It invests in assets with low risks, split almost equally between money market instruments and fixed income investments, such as government securities of medium to long term, corporate bonds.
  2. Future Balance Fund: As the name suggests, this portfolio option has proportionate distribution across high-risk equity instruments (between 30%-60%), money market instruments (up to 30%) and fixed income instruments (between 40% to 70%). It combines the capital appreciation of the former with the stability advantage of the other two while keeping a portion highly liquid.
  3. Future Maximise Fund: This fund option seeks to provide potentially high returns by making predominant investment in equities, generally anywhere between 50% to 90%. The idea is to spread the money across a variety of equities, so as to achieve diversification by sector, industry and risk – with the ultimate goal to ‘maximise’ the return. A slight portion is also invested in money market instruments and fixed income instruments too.
  4. Future Apex Fund: This one has the same risk personality as the Future maximise Fund above. The only difference is that the Future Apex Fund goes a step ahead, to reach the ‘apex’ of returns by making the bulk of the investment in equities, which are again, diverse in sector, industry and risk. The proportion of equity investment can be as high as 50% to 100%, making it a high-risk option.
  5. Future Opportunity Fund: Another high-risk fund, this aims at capital appreciation and long-term growth opportunities by investing majorly in equity and equity related instruments (between 80% to 100%). Simultaneously, it also considers debt and money market instruments, albeit in smaller proportions, for consistent returns.
  6. Future Secure Fund: This is a fund option with the least risk. It invests predominantly in low-risk assets like money market and debt instruments to provide stable returns.

All fund options serve a different objective, so you can choose the one that is in line with your investment goals. With Future Generali ULIPs, you get the benefit of switching between funds too, as per market performance and your changing goals. Just be acute and keen in your selection, and reap benefits from this hybrid product.