How ULIP can build a Good Retirement Corpus

Retirement planning becomes the primary concern of an employee in his 40s or 50s. People in the private sector are compelled to work till their late 70s without a retirement plan. A retirement plan is essential for an employee, and he should start planning in his 30s to enjoy maximum benefits from an investment scheme. Investors are shifting from traditional insurance plans to ULIP (Unit Linked Insurance Plan) due to the value-added features and benefit the ULIP scheme offers.

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Fund Name

AUM

NAV

Returns (in %)

3 Year

5 Year

10 Year

Midcap Fund

SBI Life

AUM:59,296 Cr

59,296 Cr

NAV

50.92

-0.10%

Returns

20.23%

Highest Returns

Returns

17.2%

Returns

17.54%

Get Details

Opportunities Fund

HDFC Life

AUM:34,849 Cr

34,849 Cr

NAV

79.67

0.49%

Returns

16.41%

Highest Returns

Returns

13.48%

Returns

14.66%

Get Details

High Growth Pension Fund

Axis Max Life

AUM:32 Cr

32 Cr

NAV

10.39

0.03%

Returns

22.85%

Highest Returns

Returns

22%

Returns

20%

Get Details

Opportunities Fund

ICICI Prudential Life

AUM:3,473 Cr

3,473 Cr

NAV

60.74

0.07%

Returns

13.58%

Highest Returns

Returns

13.3%

Returns

12.6%

Get Details

Multi Cap Fund

Tata AIA Life

AUM:10,835 Cr

10,835 Cr

NAV

66.38

-0.24%

Returns

17.13%

Returns

21%

Returns

22%

Highest Returns

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Disclaimer :
˜The insurers/plans mentioned are arranged in order of highest to lowest first year premium (sum of individual single premium and individual non-single premium) offered by Policybazaar’s insurer partners offering life insurance investment plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Let us discuss how ULIP helps an individual build a significant retirement corpus.

What are ULIP Plans?

ULIP is an insurance cum investment plan that comes with dual benefits of insurance coverage and wealth creation from investments. It offers the policyholder an opportunity to invest in the market of his choice. ULIP also helps an investor to beat inflation by providing significant returns on the investment. Hence, the policyholder enjoys two benefits in a single premium plan. First, half a portion of the policyholder's fund moves towards providing life coverage paid to his family in an unfortunate event of death. In contrast, with the remaining amount, the policyholder invests in the financial instrument to earn good returns.

How is ULIP Beneficial for Retirement?

ULIP is undoubtedly a beneficial tool for retirement planning due to the following reasons:

Long-term investment

Retirement is long-term planning which a policyholder should commence in his 30s or 40s. Similarly, ULIP is a long-term investment scheme that provides sufficient returns over a long-term policy, much like how investors often ask which SIP is best for achieving long-term financial goals. The investment grows on the basis of compounding power, which generates significant rewards during the tenure. Hence, the investor may cause a considerable bonus in the long-term planning to meet retirement expenses and beat inflation.
Fund switching option

The fund-switching option is one of the best features of ULIP. An investor may switch from one fund to another fund. How often he wants to reverse the fund in a year is at his discretion. For example, an investor who has invested a portion of his fund in equity may shift to debt if he wishes to lower his risk. Equity involves more risks compared to debt. However, it also provides a significant return compared to the debt instrument. So if the policyholder has a high-risk appetite, he may stay in the equity or switch to debt accordingly. In addition, if he needs clarification in both cases, he may avail another option of a balanced fund, the amalgamation of equity and debt. The investor should make the conscious switch as per the status of the market. For instance, if the equity market is incurring losses, he must shift his fund to debt which will lower the risk but provide a reasonable return. An investor following this technique or method will likely build a good corpus for retirement.
Life coverage

During the course of his life, an individual faces different kinds of health-related issues. Any invasive or long-term treatment may take a massive amount to cover medical expenses. Thus, an individual needs to safeguard his financial interest. In addition, it is also essential to meet the financial requirement of family members in the absence of a guardian. ULIP plans to provide every means to cover the expenses of family members by protecting their economic interests. Further, the amount received from the plan can be used to cover various expenses such as wedding costs, education fees, medical expenses, and many more.
Tax Exemption

The investor may accumulate tax-free wealth from ULIP plans. He may invest as much as he prefers and can build a massive corpus of tax-free wealth. The amount receivable on maturity will be exempted from tax under section 80C of the Income Tax Act 1961. In addition, the premium paid by the investor will be deducted from the taxable income under sec 10 (10D) of the Income Tax Act.
Wealth booster option

The returns on the investment are likely to grow the wealth of the investor. The ULIP provides transparency to the investor. Hence, the investor may keep track of his investment and track profit and loss in a particular market.

Fund Name	NAV	AUM	5 Yr Returns	10 Yr Returns
SBI Life Balanced Fund	₹72.66	₹19882 Cr	7.31%	9.53%
SBI Life Bond Fund	₹51.49	₹16422 Cr	5.65%	6.72%
SBI Life Equity Fund	₹194.36	₹76974 Cr	8.98%	11.41%
SBI Life Equity Optimiser Fund	₹54.14	₹2503 Cr	9.75%	11.25%
SBI Life Growth Fund	₹93.46	₹2777 Cr	8.34%	10.9%
SBI Life Money Market Fund	₹37.22	₹501 Cr	5.9%	5.95%
SBI Life Top 300 Fund	₹55.52	₹1903 Cr	8.73%	11.78%
SBI Life Pure Fund	₹27.67	₹1197 Cr	8.9%	10.71%
SBI Life Bond Optimiser Fund	₹22.73	₹3207 Cr	7.17%	-
SBI Life Bluechip Fund	₹9.85	₹3289 Cr	-	-
SBI Life Balanced Pension	₹73.24	₹808 Cr	8.07%	10.42%
SBI Life Bond Pension	₹45.77	₹546 Cr	5.49%	6.99%
SBI Life Equity Pension	₹74.18	₹12146 Cr	10.07%	12.37%
SBI Life Growth Pension	₹73.23	₹634 Cr	8.94%	11.38%
SBI Life Money Market Pension	₹34.41	₹151 Cr	5.85%	5.94%
SBI Life Equity Optimiser Pension	₹57.52	₹980 Cr	9.66%	11.96%
SBI Life Top 300 Pension	₹54.89	₹720 Cr	9.09%	12.04%
SBI Life Midcap Fund	₹50.92	₹59296 Cr	17.2%	17.54%
SBI Life Corporate Bond Fund	₹16.67	₹1031 Cr	5.5%	-
SBI Life Equity Elite II	₹51.06	₹11536 Cr	8.67%	10.92%
SBI Life Index	₹46.18	₹90 Cr	8.9%	11.33%
SBI Life Index Pension	₹48.22	₹25 Cr	9.03%	11.38%
SBI Life Discontinued Policy Fund	₹25.78	₹10597 Cr	5.74%	5.97%
SBI Life Equity Elite	₹86.03	₹12 Cr	11.37%	13.64%
SBI Life P-E Managed	₹38.93	₹199 Cr	8.76%	9.82%
SBI Life Guaranteed Pension GPF070211	₹26.95	₹2 Cr	5.28%	6.49%
SBI Life Bond Pension II	₹23.84	₹28624 Cr	5.39%	6.34%
SBI Life Equity Pension II	₹41.01	₹11046 Cr	8.97%	11.72%
SBI Life Money Market Pension II	₹21	₹1524 Cr	5.62%	5.68%
SBI Life Discontinue Pension Fund	₹21.76	₹6502 Cr	5.75%	-
SBI Life Group Growth Plus Fund	₹57.35	₹3 Cr	7.84%	-
SBI Life Group Debt Plus Fund	₹40.91	₹112 Cr	6.37%	-
SBI Life Group Balance Plus Fund	₹48.79	₹10 Cr	7.1%	-
SBI Life Group Balance Plus Fund II	₹26.8	₹1066 Cr	7.12%	-
SBI Life Group Debt Plus Fund II	₹26.56	₹323 Cr	6.4%	-
SBI Life Group Growth Plus Fund II	₹27	₹288 Cr	8.21%	-
SBI Life Group Short Term Plus Fund II	₹21.92	₹19 Cr	6.15%	-
SBI Life Group Money Market Plus Fund	₹14.02	₹2 Cr	3.24%	-

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How to Plan the Retirement through ULIP?

An individual may plan his retirement through ULIP by applying the following factors:

Start early

In order to build a good corpus for retirement, a policyholder should start early. He must begin investing in his 30s. The long-term investment option adds more value to the scheme and generates a substantial return over a long-term policy. Hence, the individual should take optimum advantage of the ULIP plan.
Select the right fund option

Selecting an appropriate fund option to invest and earn good returns is evident. However, it exclusively depends on the risk appetite of an individual to choose a fund instrument. For example, equity offers a high reward, but it also consists of elevated risk. On the other hand, debt offers low risk with low returns. In contrast, the balanced fund offers moderate risk with low to moderate returns, which can be higher than debt.
Increase the premium

With the hike in income or salary, the investor must consider increasing the premium to add more bonuses on the scheme's maturity. The premium increase will ensure the maximum return at the end of the policy term.

Conclusion

UILP is an incredible retirement tool that can be used by every kind of investor. It offers several benefits and desired results at the maturity period. Most plans do not provide transparency to the policyholder. However, with ULIP, an investor may maintain his investment portfolio. In addition, he may also make a partial withdrawal at the end of the 5-year ULIP lock-in period. The ULIP plan offers booster additions, loyalty, and maturity rewards/bonuses for staying invested long-term. Hence, as mentioned above, it can be said that ULIP builds a good corpus for retirement.

FAQ's

What is UILP?

ULIP (United Linked Insurance Plan) is a scheme that offers insurance policies and investment benefits for a single premium.
What is the lock-in period in the ULIP plan?

Before 2010, the lock-in period under the ULIP plan was three years that later increased to five years by bringing an amendment by IRDAI.