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ULIP Insurance with ESG Funds Is Trending Among Young Investors


In 2025, Unit Linked Insurance Plans (ULIPs) are seeing a modern twist that appeals strongly to young investors—Environmental, Social, and Governance (ESG) funds. ULIP insurance, already known for blending life cover with investment, is now aligning with values-driven investing. Young professionals, increasingly aware of sustainability and ethical business practices, are choosing ULIPs that invest in ESG-compliant companies while also offering long-term financial growth.

What is ULIP insurance?

ULIP insurance is a life insurance plan where a portion of the premium goes toward providing life cover, and the remaining is invested in market-linked funds. Investors can choose between equity, debt, or hybrid funds based on their financial goals and risk appetite. ULIPs also offer flexibility to switch funds, make partial withdrawals after five years, and even top up investments—all within the same policy.

Why ESG funds in ULIPs are gaining popularity

ESG funds focus on companies that meet specific criteria in environmental protection, social responsibility, and corporate governance. These funds avoid businesses with questionable environmental records or poor labour practices, which appeals to socially conscious investors.

Young professionals are increasingly combining purpose with profit. ULIP insurance policies with ESG fund options allow them to:

  • Invest responsibly without compromising potential returns

  • Support causes they care about—like clean energy, ethical labour, and inclusive governance

  • Align financial goals with personal values

  • Build wealth while contributing to sustainable development

Benefits for young investors

Choosing ESG funds within a ULIP offers several advantages:

  • Market-linked returns with a long-term horizon

  • Life insurance protection, ensuring family security

  • Tax benefits under Section 80C and Section 10(10D)

  • Switching options to adapt to changing market trends or preferences

  • Transparency in fund performance and ESG scores

For example, a 28-year-old investor can use a ULIP with ESG fund exposure to build a retirement corpus while ensuring their money supports sustainable companies. Over 10–15 years, this dual benefit of protection and ethical investing adds significant long-term value.

Conclusion

ULIP insurance with ESG fund options is no longer just a niche—it’s a trend that reflects the values of a new generation. For young investors who want growth, protection, and purpose in one plan, ULIPs with ESG alignment are proving to be a smart, future-ready choice.

 

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