The wise saying, ‘Compare apples with apples, and not with oranges’ holds true for investments too; however, sometimes investors tend to compare different investment products due to apparent similarities. One such comparison is between ULIPs and mutual fund schemes. Let’s find out the similarities and differences between the two. ULIP stands for Unit Linked Insurance Plan. Its biggest benefit is that it combines the features of both insurance cover and investment opportunities under a single plan. When the premium is paid, part of the amount goes towards providing the policy holder insurance cover, and the other part is invested in stocks and bonds so that the policy holder will get wealth appreciation. As a policy holder, you have the freedom to choose which asset class the investment should be made in. Policy holders who are risk averse can choose to have their money invested in bonds, while those who don’t mind sacrificing risk for higher returns can opt to have the money to be invested in equities.