Difference between ULIPs and Mutual Funds

Mutual Fund
Regulated by SEBI Sold by un-tied agents Stricter transparency requirements comparatively Mutual Funds are not as flexible as 1 has to purchase a new policy to increase your life cover Regulated by IRDA

ULIPs

Sold by tied agents attached to a particular insurer Lenient transparency requirements comparatively ULIPs are more flexible as they allow you to increase your life cover while the premium remains the same Investing in ULIPs costs comparatively more ULIP products are better suited for long term investment bundled with insurance cover

Investing in Mutual funds costs less Mutual Funds are better suited for those that solely focus on investment and medium-term returns. In Mutual funds only Equity Linked Tax Saving Schemes qualifies for tax benefits Mutual Funds focus on low costs and better performance as the USP

Investments made in ULIPs are instruments of saving income tax ULIP looks more at distribution reach as the USP