Investment insurance typically combines investment opportunities with insurance elements. You pay premium for insurance coverage, which often guarantees a return of your initial investment in the event of an unfortunate outcome or death (depending on the policy terms). However, investment insurance often brings a high return to its owners, although it does not guarantee it at all.
Mutual funds (MFs) are an investment instrument, in which your funds are pooled among other investors and invested in a portfolio of securities, stocks, bonds and other assets. Asset values may fluctuate. This means you could lose some or even all of your investment if the market conditions are unfavorable. Besides, some mutual funds may have withdrawal restrictions. It may take time for you to sell shares, especially if the fund is invested in illiquid assets.
Source: https://cleartax.in/s/ulips-vs-mutual-funds
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