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Questions You Should Ask Before Investing In ULIP
Life insurance has come a long way since the mid-1900s when it was first launched. Rising awareness and consumer expectations have brought about a revolution in the life insurance sector. While earlier life insurance plans were rigid with a long-term perspective, today Unit Linked Insurance Plans (ULIPs) provide the much-needed flexibility and also a shorter tenure investment opportunity.
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- Questions You Should Ask Before Investing In ULIP
List of ULIP Funds ~
Fund Name
AUM
NAV
Returns (in %)
3 Year
5 Year
10 Year
Midcap Fund
SBI Life
AUM:59,296 Cr
59,296 Cr
NAV
51.76
-0.26%
Returns
19.2%
Highest Returns
Opportunities Fund
HDFC Life
AUM:35,005 Cr
35,005 Cr
NAV
81.39
-0.41%
Returns
15.69%
Highest Returns
High Growth Pension Fund
Axis Max Life
AUM:32 Cr
32 Cr
NAV
10.58
-0.06%
Returns
22.85%
Highest Returns
US Technology Advantage Fund
ICICI Prudential Life
AUM:0 Cr
0 Cr
NAV
0.00%
Returns
-
Multi Cap Fund
Tata AIA Life
AUM:10,835 Cr
10,835 Cr
NAV
67.87
-0.33%
Returns
16.19%
see more plans
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
Even ULIPS has undergone many changes in their charges and structure when SEBI intervened some years back. The version of ULIPs offered today is revamped and offers some of the best benefits. Investing in ULIPs has never been so gratifying as it is today and you, as an investor stand the chance to reap the benefits.
Though investing in a ULIP is good, there are certain things you should know or rather some questions you should ask before you invest in a ULIP. Are you investing in a ULIP blindly? What are the questions you should ask? Let us see –
Is the Plan Suitable for Your Requirement?
The most important question is whether the plan fits your financial goals. Though a ULIP provides flexibility in the form of partial withdrawals, such withdrawals are allowed only after 5 years. Moreover, though the returns in a ULIP are good, holding the plan for a longer tenure is important to achieve such returns. So, measure the plan against your financial requirements before you buy.
What are the charges?
A few years back when SEBI had not intervened, ULIPs had colossal charges deducted from the premium which resulted in very low yields. Thanks to the changes made, ULIPs now have a very low charge structure that maximizes returns. Charges under a ULIP are in the form of Premium Allocation charge, fund management charge, mortality charge, administrative charge, etc. Though the other charges are inevitable, many plans do not levy the premium allocation charge. So, study the charge structure of the plans available and buy one with the lowest charges.
What is the Coverage Available?
The determination of the Sum Assured under ULIPs depends on the amount of premium paid by the policyholder. The premium coverage is expressed as a multiple of the annual premium or single premium paid. The multiple allowed varies from plan to plan and so assess the coverage available in the plan under consideration.
What are the Historic Returns of the Portfolio?
A ULIP provides good returns by virtue of diversification. The funds available in the plan have a diversified portfolio comprising of multiple companies. Since ULIPs are subject to market risks and the returns are not guaranteed, it is important to check the historical returns generated by the funds so far. This would give you an estimated, though not accurate, the trend of returns generated and expected.
Latest ULIP NAVs
| Fund Name | NAV  |
AUM |
5 Yr Returns |
10 Yr Returns | |
|---|---|---|---|---|---|
| SBI Life Balanced Fund | ₹73 | ₹19882 Cr | 7.33% | 9.19% | |
| SBI Life Bond Fund | ₹51.67 | ₹16422 Cr | 5.71% | 6.57% | |
| SBI Life Equity Fund | ₹195.16 | ₹76974 Cr | 8.83% | 10.88% | |
| SBI Life Equity Optimiser Fund | ₹54.21 | ₹2503 Cr | 9.55% | 10.76% | |
| SBI Life Growth Fund | ₹94.27 | ₹2777 Cr | 8.33% | 10.5% | |
| SBI Life Money Market Fund | ₹37.34 | ₹501 Cr | 5.93% | 5.93% | |
| SBI Life Top 300 Fund | ₹55.88 | ₹1903 Cr | 8.68% | 11.34% | |
| SBI Life Pure Fund | ₹27.51 | ₹1197 Cr | 8.35% | 10.36% | |
| SBI Life Bond Optimiser Fund | ₹22.79 | ₹3207 Cr | 7.15% | - | |
| SBI Life Bluechip Fund | ₹9.85 | ₹3289 Cr | - | - | |
| SBI Life Balanced Pension | ₹73.3 | ₹808 Cr | 7.97% | 10.02% | |
| SBI Life Bond Pension | ₹45.92 | ₹546 Cr | 5.56% | 6.81% | |
| SBI Life Equity Pension | ₹74.73 | ₹12146 Cr | 10.01% | 11.89% | |
| SBI Life Growth Pension | ₹74.1 | ₹634 Cr | 9% | 11.01% | |
| SBI Life Money Market Pension | ₹34.52 | ₹151 Cr | 5.89% | 5.92% | |
| SBI Life Equity Optimiser Pension | ₹57.55 | ₹980 Cr | 9.49% | 11.43% | |
| SBI Life Top 300 Pension | ₹55.03 | ₹720 Cr | 8.94% | 11.55% | |
| SBI Life Midcap Fund | ₹51.76 | ₹59296 Cr | 16.69% | 17.17% | |
| SBI Life Corporate Bond Fund | ₹16.72 | ₹1031 Cr | 5.48% | - | |
| SBI Life Equity Elite II | ₹51.21 | ₹11536 Cr | 8.59% | 10.44% | |
| SBI Life Index | ₹46.25 | ₹90 Cr | 8.85% | 10.76% | |
| SBI Life Index Pension | ₹48.3 | ₹25 Cr | 8.98% | 10.81% | |
| SBI Life Discontinued Policy Fund | ₹25.86 | ₹10597 Cr | 5.72% | 5.94% | |
| SBI Life Equity Elite | ₹86.4 | ₹12 Cr | 11.31% | 13.17% | |
| SBI Life P-E Managed | ₹38.73 | ₹199 Cr | 8.43% | 9.26% | |
| SBI Life Guaranteed Pension GPF070211 | ₹27.04 | ₹2 Cr | 5.25% | 6.28% | |
| SBI Life Bond Pension II | ₹23.91 | ₹28624 Cr | 5.43% | 6.16% | |
| SBI Life Equity Pension II | ₹41.11 | ₹11046 Cr | 8.81% | 11.2% | |
| SBI Life Money Market Pension II | ₹21.07 | ₹1524 Cr | 5.65% | 5.66% | |
| SBI Life Discontinue Pension Fund | ₹21.83 | ₹6502 Cr | 5.74% | - | |
| SBI Life Group Growth Plus Fund | ₹57.6 | ₹3 Cr | 7.8% | - | |
| SBI Life Group Debt Plus Fund | ₹41.1 | ₹112 Cr | 6.4% | - | |
| SBI Life Group Balance Plus Fund | ₹48.99 | ₹10 Cr | 7.11% | - | |
| SBI Life Group Balance Plus Fund II | ₹26.92 | ₹1066 Cr | 7.13% | - | |
| SBI Life Group Debt Plus Fund II | ₹26.72 | ₹323 Cr | 6.49% | - | |
| SBI Life Group Growth Plus Fund II | ₹27.08 | ₹288 Cr | 8.14% | - | |
| SBI Life Group Short Term Plus Fund II | ₹22.05 | ₹19 Cr | 6.2% | - | |
| SBI Life Group Money Market Plus Fund | ₹14.06 | ₹2 Cr | 3.26% | - | |
| SBI Life Group Balanced Pension Fund | ₹10.21 | ₹125 Cr | - | - |
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What are the Flexibility Conditions?
ULIPs find favor with investors due to the flexibility they provide, offering features such as switching between funds, partial withdrawals, premium redirection, and top-up facilities, and asset allocation improves the best SIP investment outcome when used thoughtfully alongside these options. A ULIP has ample scope of flexibility, but while every plan provides these features, they are subject to certain conditions. For instance, there is usually a cap on the frequency of free switches and a limit on free partial withdrawals. Therefore, it is important to find out the exact limits of free facilities in the plan you are considering buying so that the flexibility aligns with your long-term investment needs.
Are There Any Extra Benefits Available?
Gone are the days when ULIPs provided death and maturity benefits. Nowadays, insurers are increasingly providing the features of guaranteed additions and loyalty additions which add a fixed percentage of returns to the existing fund value at certain intervals. More and more plans are promising these benefits and they should also form a part of your consideration when you are buying a ULIP.
Final Thoughts
These questions usually take care of any and every query you might have when you are investing in a ULIP plan. You should not invest solely based on the plan’s promotional campaign or at the behest of your agent. Ask these questions and compare the multiple plans available in the market. If it seems confusing to approach a broker, they have multiple plan options and are better placed in meeting your queries than your independent agent.
Insurers Offering ULIPs
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or
insurance product offered by an insurer.
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A ULIP (Unit Linked Insurance Plan) is a product that combines
˜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
*All savings are provided by the insurer as per the IRDAI approved insurance
plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.