Will I end up with more loss in my ULIP?

I have taken a seven-year ULIP. They are investing my money in mutual funds. I have already paid for two years. I noticed that the plan has made a loss of 12%. I may not be able to pay the money after two years due to some unforeseen circumstances. I am not sure if this loss will increase in two years. Will I end up with more loss?
-Janki Patel

A Unit Linked Insurance Plan or ULIP is an insurance plan with various investment options. It does not invest in mutual funds. It invests in various investment options managed by the insurance company. You have not mentioned any details of the plan. So, we are offering you some general pointers. We are assuming that you have chosen the equity fund option in your ULIP. The stock market hasn’t done very well in the last two years and many equity mutual funds have recorded poor performance due to this. Yes, the benchmark index is at an all time high, but the rally is led by some select stocks. Since the rally was not broad-based, only a few equity mutual fund schemes benefited from the rally.

Your ULIP investment’s performance depends on the future of the stock market. And it is difficult to predict the performance of the stock market.


It is always better to buy a pure term insurance plan for your life insurance needs. Term plans have very low premium and that will help you to buy a large life insurance cover. Mutual funds are ideal to meet your investment goals, as they are pure investment vehicle.