ULIP vs term insurance: How to choose the right coverage — avoid these 5 common mistakes most Indians make

When people think about life insurance, they always consider Unit-Linked Insurance Plans and term insurance. ULIPs focus on combining investment with insurance, whereas term insurance ensures life cover. Here, we discuss the five most common mistakes people make when deciding between ULIPs and term insurance, and how to avoid these pitfalls. Confusing insurance with investment A common mistake aspirational ULIP and term insurance buyers commit is failing to understand the core purpose and objectives of these plans. Term insurance, however, serves those individuals in the most efficient way who are seeking affordable life coverage protection for a pre-defined period of time, i.e., term.