The fund options under the ULIP plans are subject to changes and risks of the capital market. This happens since part of the premium paid is shifted towards providing life cover, while the remaining amount is invested in a variety of funds as per your choice and risk appetite. For example, equity funds are subject to high market risks and promise higher returns; therefore, equities are suitable for those individuals who seek capital appreciation and have a high-risk appetite. On the other hand, debt investment funds are suitable for individuals who seek long-term capital preservation. Given the fact that ULIPs invest in capital market-linked instruments and stock-market linked investment tools including bonds and mutual funds, the risk associated from fund to fund. Moreover, since the policyholder bears the risk, you need to carefully analyse your goals and risk appetite before investing.