ULIPs are not a pure insurance product, but combine the features of both Insurance and Investments. It is this flavor of investments that makes this product volatile and susceptible to market changes.
As a policy holder one can choose between the various ULIP plans that an Insurance company has and these typically vary according to the percentage split between debt & equity or the kind of sectors that the fund manager would typically invest in.

Given that the equity markets have a certain level of inherent uncertainty, it is obvious that many policy holders would want to re-think their fund selections - based on how the market has performed and what the projections look like.

It is with this in mind, that most ULIPs come with a switch option - wherein the customer is allowed to switch across various plans from the same company. In the past it has been noticed that when the:
- markets are down, a lot of investors switch from debt to equity
- markets suddenly climb, there are not too many switch requests

Also remember that most companies charge around Rs 100/- per switch, once the same has been effected.