For those looking for a life insurance cover along with the benefits of upward market movements, Unit Linked Insurance Plans (ULIP) are a good investment option. These plans work both towards achieving long-term goals, in addition to providing a life insurance cover. However, before investing in ULIPs, it is essential to note that the whole amount you pay as premium does not get utilized to buy only units. The insurer deducts certain charges and fees before allotting units. Then the premium amount that remains gets invested in different asset classes like equity and debt. The charges, however, vary depending upon the ULIP plans offered by insurance companies, but some of them are applied commonly. Find out about these charges before investing: Fund management charge: While the charges differ from one fund to another, according to the IRDAI guidelines, the maximum charge per annum is 1.35 per cent. This fee is charged for management of the different type of funds chosen by the insurance company. This fee is deducted before arriving at the Net Asset Value. Premium allocation charge: These charges are the initial and renewal costs, and the commission expenses of the intermediary. At a fixed percentage of the premium received these premium allocation charges are deducted. These are usually charged at a higher rate at the initial years. Switching charges: This allows policyholders to shift their investments from one fund to another. However, it should be within the available options under the purchased ULIP plan. The units can be transferred fully or partially between equity and debt fund options. The first five to eight switches are normally not charged, after which about Rs. 50-300 is charged. Mortality charges: Just like all life insurance products where mortality charges apply, ULIP plans also come with an insurance cover. These charges are determined after considering factors such as the age, and sum assured and are charged on a monthly basis. Partial withdrawal charge: Though you can make a partial withdrawal of funds, some insurer allows an unlimited number of partial withdrawals, whereas others limit it to 2-4. After which a specific charge is levied per withdrawal. However, know that partial withdrawals can be made only after the lock-in period of 5 years.