July 15, 2024

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How are the non-linked insurance plans different from the linked insurance plan?

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In today’s world, humans realize the fragility of their life and the importance of a good insurance policy for them. But it is impossible to put monetary value in life, and it is important to collaborate with one due to the very people who make their life good.

So for the sake of the people you love and those who depend on your requirements, you must invest in a complete insurance policy.

With so many types of insurance plans available in the market, selecting the right insurance policy becomes quite daunting. So it is important to choose the best plan that is suitable for you, provides the right features, and also fits your budget.

The two parameters of the insurance policies are available in the market, named the linked and non-linked insurance plans. Further, you get all the differences between the linked and non-linked insurance plans.

What meaning of the termĀ non-linked insurance plan?

Non-linked insurance plans are the traditional type of insurance plan that only objective to provide comprehensive financial protection to your family in the case of uncertainty occurs in life.

Non-insurance plans are not linked directly to the market; hence the return in this insurance plan is not dependent on how the market platforms.

Non-insurance plans are low-risk insurance plans that provide low returns, maturity benefits, and well-defined death.

Dissimilarities between the non-linked insurance plan to the linked insurance plans.

Here we highlight the dissimilarities between the linked and non-linked insurance plans.

  • Investment flexibility: Linked insurance policies offer more flexibility in the aspects of the investment, whereas the non-linked insurance plan does not permit you to select your investments.
  • Transparency: The investment in the linked insurance plan is more transparent than the non-linked insurance plans. Also, the non-linked insurance plan has no component of the investment.
  • Partial withdrawals: Linked insurance plans give you the option to withdraw the funds partially. At the same time, the non-linked insurance plan gives you the offer to darwin the funds permanently.
  • Switching options: Linked insurance plan offers you the option to switch the funds as your varying preference over time. For instance, if you invest in the equity type of investment and then want to shift to the low-risk debt.

How does ULIP work?

In the ULIPs, the shares on the premiums offer a secure life that gives coverage to the policyholder. On the other hand, the other premium share goes under the investment in several options. You can select the fund aligned with the wealth creation plan and risk tolerance.

If the unfortunate death occurs of the insured person under the ULIP policy, then the nominee person will get the death benefits under this policy. So this is how the ULIP works.


In this article, we tell you the details about non-linked and linked insurance plans. Also, we will give you how the ULIP works.

Hope the given information is informative for you. Stay joined if you want more articles like this.

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