Unit Linked Insurance Plans (ULIPs) have been there in India since 1971. But after the opening of the insurance sector, the policy has gained special importance as it combines the multi aspects of insurance, investment and tax benefits. ULIP is one of the most preferred instruments available in the Indian market especially because of the volatility of the Indian stock market. It is observed that ULIP will continue to be a good investment option to the investors even in a plunging stock market scenario.

Insurance is one prominent industry in the whole economy which has shown a continuous growth since the revival of the economy. One major plus point or rather the reason for this growth curve is the huge and vast population that India has. And out of the total population, according to a latest research study, nearly 80% of the people are uninsured in India. So, like the old story of a shoemaker going to a primitive country who to his astonishment found that none of the people wore shoes there and identified unparalleled opportunity, the insurance companies in India have a large source of untapped market, which is one factor that attracted many foreign players to set up joint ventures here. Now, with the opening up of the sector backed by foreign expertise, the Indian insurance industry has become more vibrant. This is very much evident from the increase in market share by 120% from the opening up of the sector in 2000 when it was only $21.71 bn to $47.89 bn in 2007.

The opening up of the insurance sector to the private companies has changed the face of the insurance industry in India. Traditionally, LIC had taken care of only the life insurance needs of the people. But now, with the entry of the private companies the role of the insurers has changed from the traditional life insurance protection to risk management experts covering the risk of job loss through pension plans and retirement solutions, loss of wealth through various investment plans so on and so forth. This has increased the scope of insurance as another investment vehicle available in the Indian financial market.

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