ULIP is an abbreviation for Unit Linked Insurance Policy. A ULIP is a life insurance policy which provides a combination of risk cover and investment.
The dynamics of the capital market have a direct bearing on the performance of the ULIPs if the policyholder opts for investment in funds having equity element in it.
REMEMBER THAT IN A UNIT LINKED INSURANCE POLICY, THE INVESTMENT RISK IS GENERALLY BORNE BY THE INVESTOR.