Insurance Awareness - Life Insurance - LIC
Which life insurance policy type combines the benefits of life cover with the flexibility of switching between different investment funds during the policy term?
Which life insurance policy type combines the benefits of life cover with the flexibility of switching between different investment funds during the policy term?
hard Q10 of 15
Step-by-Step Solution
Step 1: Understand policy flexibility
ULIPs allow policyholders to switch between different investment funds (equity, debt, balanced) during the policy term, combining life cover with investment flexibility.Step 2: Analyze options
Endowment and Money-back policies do not offer fund switching; Term Insurance is pure risk cover without investment.Step 3: Confirm uniqueness
This switching feature is unique to ULIPs among life insurance policies.Final Answer:
Unit Linked Insurance Plan (ULIP) → Option BQuick Check:
ULIPs' fund switching feature is a key selling point, confirming the answer.
Quick Trick: ULIP = investment flexibility + life cover.
Common Mistakes:
MISTAKES- Assuming traditional policies offer fund switching like ULIPs.
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