It’s a common confusion which is the best investment option. Mutual funds are cheaper, But only in the short run. Over a long period (may be 15 - 20 yrs) ULIP will give you a better return over Mutual funds as the fund management charges are lower than mutual funds. It’s a small factor but the FMC are taken on a daily basis by NAV adjustment and over a long period it will eat in to your fund value. Also there are other charges pertaining to MF such as marketing expenses, Custodian charges, Trustee fee, audit fee which are not visible to the investors. Also tax benefits are not available in mutual funds except for ELSS.