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    Question

    Which of the following statements about Unit-Linked Insurance Plans (ULIPs) is/are correct?

    1) ULIPs are a type of life insurance plan that combine insurance coverage and investment.

    2) ULIPs offer the flexibility to invest in various asset classes such as equities, bonds, and money market instruments.

    3) The returns on the investment are decided irrespective of the performance of the chosen asset classes.

    A 1 only Correct Answer Incorrect Answer
    B 1 and 2 only Correct Answer Incorrect Answer
    C 1 and 3 only Correct Answer Incorrect Answer
    D 2 only Correct Answer Incorrect Answer
    E 1, 2 and 3 Correct Answer Incorrect Answer

    Solution

    Unit-Linked Insurance Plans (ULIPs) are a type of life insurance plan that combine insurance coverage and investment. ULIPs offer the flexibility to invest in various asset classes such as equities, bonds, and money market instruments. The premiums paid towards ULIPs are split between the insurance coverage and investment in the chosen asset classes. The returns on the investment are linked to the performance of the chosen asset classes. Hence, both statements are correct.

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