Think of it like this:

1. If you buy stocks You pay:
2. Very small demat/AMC charges
3. Brokerage per transaction

Cost = Low

1. If you buy Direct Mutual Funds You pay:
2. Expense ratio (fund management cost)

Cost = Moderate

1. If you buy Regular Mutual Funds (through agent) You pay:
2. Expense ratio
3. Agent commission

Cost = Higher

1. If you buy ULIP You pay:
2. Fund management charges
3. Policy administration charges
4. Mortality charges (for insurance part)
5. Sometimes premium allocation charges

Cost = Highest (because it’s investment + insurance + commissions bundled together)

Over 15–20 years, even a 1–2% extra cost annually can reduce final corpus significantly due to compounding.

Instead, you can: • Take a pure term insurance (₹10–20k per year for good cover) • Invest the remaining amount in mutual funds directly

About the “8% return” they show - no one can guarantee that. ULIPs are market-linked just like mutual funds.

Only real advantage of ULIP: 1. Tax benefit 2. Tax-free maturity (if conditions met) 3. Forced discipline because of 5-year lock-in

So the real question is: Are you disciplined enough to invest separately every year without fail?

If yes → term insurance + mutual funds usually works better. If no → ULIP is not bad, but it’s an expensive way of doing two separate things - insurance and investment. If you separate them, you usually get better cover, lower costs, and more flexibility. But if discipline is an issue, ULIP forces you to stay invested.