In case of ULIPs, which of the following statements is correct?

A. Entire premium is invested in units

B. Premium less charges are invested

C. Premium less bonuses are invested in units

D. Premium less risk charges are invested

Answer: Option B

Solution(By Examveda Team)

In a Ulip, the entire amount paid as premium is not used to purchase units. The insurers deduct certain charges and fees before allotting units. The remaining premium amount is invested in various asset classes such as debt, equity or both (called fund options) depending on policyholder's choice.