The proliferation of life insurance products in India has created a complex decision-making environment for policyholders, particularly with respect to market-linked and traditional insurance instruments. This study presents a comparative empirical investigation of policyholder perception towards Unit Linked Insurance Plans (ULIPs) and Endowment Policies, with primary reference to the Life Insurance Corporation of India (LIC). A structured questionnaire was administered to 150 respondents, and data were analyzed using percentage analysis, Chi-square test, Karl Pearson's correlation coefficient, and one-way Analysis of Variance (ANOVA). The findings reveal that younger policyholders (aged 25–35) predominantly prefer ULIPs owing to their market-linked return potential and investment flexibility, while older demographics exhibit a stronger preference for the guaranteed returns and capital security offered by Endowment Policies. The Chi-square analysis confirms a statistically significant association between age group and policy preference (χ² = 18.34 > critical value 7.815, df = 3, p < 0.05). ANOVA results demonstrate that income level significantly influences investment decisions (F = 5.12 > table value 2.70). Correlation analysis further establishes a perfect positive relationship between income and ULIP investment (r = 1.0). The study concludes that awareness gaps, risk tolerance, and financial literacy are pivotal determinants of insurance selection, and recommends targeted consumer education and product transparency initiatives by insurance providers.

Keywords: Unit Linked Insurance Plans (ULIPs), Endowment Policies, Policyholder Perception, Insurance Awareness, Risk Tolerance, Financial Literacy, LIC of India