Before buying any ULIP plan, know your risk appetite, find out if you can manage up and downs of money during ULIP period? Because the moment you buy a ULIP plan one tend to enter in corporate market, where market fluctuations can some time increase your money or can deprive it further(depends on current market condition). So it is a situation where only experts can survive, therefore, it is important to know first, that if you can handle a sudden change in your assets, and if yes, than only move on to the second dimension.

However, a ULIP product gives the flexibility for the protection of your money. That means if the market conditions are not good and one do not want to take risk with his money, than he can change the value of his funds by drifting them from one (that is more risky) to another (which is less risky) but one need to pay extra amount in his premium for every switching of the funds. The debt funds, balanced funds, diversified equity funds are co-related with ULIP under which an investor can change his protection shield accordingly.

Another positive point of ULIP is that if the ULIP holder does not have specific time to maintain his funds from market fluctuations than one can even take the help of Bench markers to manage his funds, this will provide him a secure investment, and however, some amount is deductable before NAV, if one chooses this option during his ULIP. 

Lastly, it is important for the person who is seeking to buy a ULIP plan to thoroughly search about the product while knowing how a ULIP works, where his money going to transfer or invested etc. so that later on he may not get confused with different technical terms of ULIP. For instance, one should know that the invested money in a ULIP plan is called UNITS, and the benefits that a UNITS gains is called NET ASSET VALUE (NAV). However, the Net Asset Value of a Unit totally depends on the market fluctuation. Same like this, there are many technical terms that a person should ask to his adviser before investing in a ULIP plan so that one may not opt a wrong choice.