What is NAV in ULIPs?

ULIPs offer the dual benefit of life coverage and investments under one plan. Besides, they also provide policyholders with the flexibility to switch funds, make partial withdrawals, and avail of tax benefits. If maintained rightly, the investment component of ULIP can generate good returns.

Read more
Best ULIP Plans
  • Guaranteed Tax Savings

    Guaranteed Tax Savings

    Under sec 80C & 10(10D)
  • savings

    ₹1 Crore

    Invest ₹10k Per Month*
  • Zero LTCG Tax

    Zero LTCG Tax

    Unlike 10% in Mutual Funds

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply

Top performing plans with High Returns*

Invest ₹10K/month & Get ₹1 Crore returns*

+91
Secure
We don’t spam
View Plans
Please wait. We Are Processing..
Plans available only for people of Indian origin By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs #Discount offered by insurance company
Get Updates on WhatsApp
We are rated
rating
58.9 million
Registered Consumers
51
Insurance
Partners
26.4 million
Policies
Sold

Understanding the concept of NAV (Net Asset Value) is crucial in determining the returns generated by ULIP investments.

What is NAV?

Net Asset Value (NAV) is the value of a single unit of an asset minus liabilities of the investment fund. It helps in tracking the performance of a fund an individual has or wants to invest in.

In the case of ULIPs, the investment component has a NAV. Units under a fund are allotted based on the premium paid by the policyholder. It includes all investments held under a Unit Linked Insurance Plan, such as stocks and mutual funds. 

The value of each unit held under the policy is the NAV of ULIP. It reflects the current market value of the underlying investments in the plan.

The Net Asset Value in ULIPs changes daily as it is influenced by the performance of the underlying assets held by the fund. If the fund performs well, the NAV will increase and vice-versa.

How is NAV in ULIPs Calculated?

The formulae to calculate ULIP NAV is: 

NAV = (Total market value of investments held by the fund + Value of any current assets - Value of any current liabilities - Expenses) / Number of units existing on the valuation date

NAV in ULIPs can be calculated in the following steps:

Step 1: The value of all the investments made by the fund is added up, including stocks, bonds, and other securities. Any income earned from these investments is also included.

Step 2: The fund's liabilities, such as operating expenses, are subtracted from the total value of the investments.

Step 3: The resulting amount is divided by the total number of units issued by the fund. This gives the NAV of each unit of the fund.

Example:

Let's assume that a ULIP has:

Total Investment value = Rs. 50 crores

Liabilities = Rs. 1 crore

Total Units Issued = Rs. 5 crore 

Calculation Step Formula Used Value
Total Value of Investments Total Value of Assets + Income Earned INR 60 crores
Liabilities Operating Expenses INR 1 crore
Net Value of the Fund (Total Value of Investments - Liabilities) INR 59 crores
NAV per Unit (Net Value of the Fund / Total Number of Units Issued) INR 9.8

Detailed illustration of calculations:

Total Value of Investments

Total Value of Investments = Rs. 55 crores (Value of Assets) + Rs. 5 crores (Income Earned) = RS. 60 crores

Liabilities

Liabilities = Rs. 1 crore

Net Value of Fund

Net Value of the Fund = Total Value of Investments - Liabilities = Rs. 60 crores - Rs. 1 crore = Rs. 59 crores

Net Asset Value per Unit

NAV per Unit = Net Value of the Fund / Total Number of Units Issued = Rs. 59 crores / 5 crores = Rs. 9.8

Therefore, the NAV per unit of the ULIP in this example is Rs 9.8.

Importance of NAV in ULIPs

The Net Asset Value (NAV) of ULIP is calculated daily. It is therefore important for all investors to keep an eye on it to make informed decisions. Here are a few reasons why monitoring NAV is essential in ULIPs:

  • Helps in tracking the fund performance 

  • Helps in making informed investment decisions

  • Helps in assessing risk

  • Helps in managing costs 

In Conclusion

Investors should keep in mind that NAV can be influenced by market fluctuations and changes in the value of the underlying assets of the fund. NAV in ULIP is a key component to determine a fund’s future performance. It is important to carefully assess the risk profile and investment objectives before a ULIP scheme.

Grow your wealth & meet your Financial goals

Systematically Invest in high growth plans with returns upto 18%*
View plans
Standard T & C Apply*
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
Invest more get more
capital guarantee
Investment Calculator
  • One time
  • Monthly
/ Year
Sensex has given 10% return from 2010 - 2020
You invest
You get
View plans

Ulip plans articles

Recent Articles
Popular Articles
SBI ULIP Login

11 May 2023

As a policyholder of SBI ULIP, you can easily manage
Read more
Bajaj Allianz ULIP Login

11 May 2023

The Bajaj Allianz ULIP Login is an online service feature that
Read more
How Capital Gains Are Calculated in ULIP Plan?

25 Apr 2023

Union Budget 2023 has recently brought ULIP Capital Gains Tax
Read more
4G ULIPs vs Mutual Funds

07 Apr 2023

Investing in financial instruments is an essential part of
Read more
ULIP Plans for Child Education

16 Mar 2023

In a world full of uncertainties, securing the future of
Read more
ULIP Calculator
A ULIP calculator is a specifically developed tool which helps the insurance buyers to calculate the premium
Read more
7 Things to Know About the Tax Benefits of ULIPs
Nowadays, Unit Linked Insurance Plans, i.e., ULIPs, have evolved as the popular income tax saving investment
Read more
ULIP Fund Returns
ULIP or Unit Linked Insurance plan  provides a combined benefit of investment and life cover. According to the
Read more
SBI Life Smart Privilege Plan: Benefits & Features
SBI Life Smart Privilege is a unit-linked, non-participating life insurance plan offered by SBI Life Insurance
Read more
11 ULIP Charges You Should Know About
Unit-Linked Insurance plan (ULIP) offers dual benefits of insurance and investment. Unlike traditional insurance
Read more

top
  • Zero% commission
  • No hidden charges
  • Expert Advice
  • 100% calls recorded
Invest ₹10k/month Get ₹1Cr
Tax free on maturity*
Mobile +91
*T&C Applied.
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL