7 Replies to “what is the benefit of fund switch in ULIP insurance plan?”

  1. In any ULIP plan, there are different funds which are either based on equity, debt or mix of both. Each fund has different NAV (Net Asset Value) or the cost of 1 unit,which changes every time there is some change in equity or debt market condition.
    If someone switches from one fund to another and NAV of fund is different,then number of units will change, but the fund value will remain same.


    Vishal Kashyap,

  2. Hi!
    All companies give the feature of Switching the Funds in ULIP’s . Since it is good option to practice it. Its related to market conditions and if market favors then fund is invested in Equity , but if its on down size then debt is best place to position the fund. And above all there are no charges for initial switchings.
    and if you compare it with MF then one will have to pay the cost of managing his own funds.

    Hence it is advisable to switch the funds only when required.




  3. Whenever you invested in ULIP policies you should keep on watching the NAV of the invested fund. suppose you have invested in Growth or equity fund , the fund value reaches the certain percentage and share market is not performing well immediately you should switch your fund to secure fund or balanced fund.

    for further clarification keep in touch through [email protected]

  4. Markets are always volatile and unpredictable.

    Switching is related with your risk appetite. When you become risk averse, you should switch from equity to debt and vise-versa.

    Switching from equity to debt might increase your no of units but not the fund value.


  5. Individuals can switch between the ULIP variants outlined above to capitalise on investment opportunities across the equity and debt markets. Some insurance companies allow a certain number of free’ switches. This is an important feature that allows the informed individual/investor to benefit from the vagaries of stock/debt markets. For instance, when stock markets were on the brink of 7,000 points (Sensex), the informed investor could have shifted his assets from an Aggressive ULIP to a low-risk Conservative ULIP.

    Switching also helps individuals on another front. They can shift from an Aggressive to a Balanced or a Conservative ULIP as they approach retirement. This is a reflection of the change in their risk appetite, as they grow older.

  6. There are switch facility provided in ULIP its means you have to move your fund invested from one sigment to another suitable sigments which is appropriate suitable in the volatile market.

    The advantage is to take benefit of equity & debts markets due to markets are always volatile.

    When market is continuously goes up side the equity option is best and when market is continuously goes down side the debts option is best.

    Use of proper switching option increase the number of units as well fund value due to each funds have different NAV.

  7. Insurance company maintains different kind of funds and these funds have different ration of exposure to risk, Like if 70-80% money will be in equity it will be carrying more risk with it, where as if money is invested in govt securities then returns will be lower but there will not be any risk attached to it.

    So as per the market situation you can do the switches and save your money from risk, suppose if market is doing well you can switch from govt/debt fund to equity(growth) fund, and if market is not doing well so you can put your money back to govt/Debt (secured) fund.

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