What Are Mid-Cap ULIP Funds? How to determine which fund options are ideal for you?

If you are planning to invest in a ULIP, you need to be well-versed with the fund options that are provided to you. Broadly speaking, the fund options can be categorized into equity, debt, hybrid, and liquid funds. However, there are sub-divisions to these categories as well, and one of them is mid-cap funds.

Let us learn what a mid-cap ULIP fund is, and also have a look at the other ULIP fund options and see when they should be opted for. This way, you will be able to pick the fund option most suitable for you.

What are Mid-Cap ULIP Funds?

A mid-cap ULIP fund is an investment where the funds are invested in stocks of mid-cap companies. Mid-cap funds offer higher returns to investors but come with a greater risk value when compared to large-cap options. They are at a lower risk than small-cap funds due to lower volatility in stock prices. However, mid-cap ULIP funds are not for those who do not want to take a risk. These funds are often popular picks for those investing in ULIP insurance plans.

Comparing Large-Cap and Mid-Cap Funds

Both large-cap and mid-cap funds are considered highly risky, as they deal with investments of stocks in large-cap and mid-cap companies. The stock prices of large-cap companies are not highly volatile, and hence the risk is comparatively less when compared to the highly volatile stocks of mid-cap companies. However, people who are open to taking huge risks often reap considerable returns in the long run.

Let us also have a look at the other ULIP fund options to understand each of them better.

ULIP Debt Funds

The ULIP debt funds are also known as income funds or bond funds. This fund allocation has low risks, and the investments are made in fixed-income instruments. These provide a medium return as a low percentage of funds is invested in equity, and the remaining funds are invested in debt instruments. Some common debt instruments that the ULIP funds invest in include government and corporate bonds and securities.

Debt funds are ideal for those looking for a low-risk return on their ULIP investment. These provide a steady income for those planning for retirement or their kids’ education. This is one fund option that certainly favors those who have a financial commitment in the future.

ULIP Hybrid Funds

Known to be the most stable fund of all the listed ones, the balanced fund falls under a medium-risk profile. Here the funds are smartly invested in both debt instruments and equity. The balanced fund follows the limit of 50:50 ratios when investing in debt and equity. Therefore, this option is not just stable but also an ideal option to protect your ULIP funds.

Liquidity Funds

This is the type of fund that has the lowest risk and also goes by the name of Cash Funds. These funds provide good returns with a low risk within the short term. In this type of fund, the investments are made in market instruments like treasury bills or bank deposits. This is a perfect option for those who want to avoid putting their hard-earned money at risk.

Now that we know about the different types of ULIP funds, one needs to choose an option based on the risk they are willing to take, the short-term and long-term financial goals, and the returns they are expecting. Balanced funds provide a good return for those looking to take a low risk. However, those with an appetite for sizable risks can opt for mid-cap ULIP funds.


ULIPs are investment plans that provide the policyholder with life insurance. So, before you pick any ULIP fund, make sure that you understand your need or objective behind it.

So, whatever fund option you choose for your ULIP, ensure you have done sufficient research and invest wisely. If you are unclear about what is a ULIP plan or about any of its components at any point in time, make sure that you talk to your insurance company or agent.

Investment in ULIPs comes with risk factors but also provides excellent returns and benefits to the policyholder in the long run. Hence, ensure you understand this investment’s ins and outs before taking the first step forward.

For more insurance related content, please check our SocialTalky Insurance section .

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