ULIP Returns in 40 Years

Estimating the ULIP returns over 40 years offers a unique perspective on wealth accumulation, combining insurance coverage with market-linked investments. Gain insights into the factors influencing ULIP performance and discover the implications for investors considering a prolonged investment horizon.

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Top ULIP Funds
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
1,539 Cr
Returns
25.81%
Returns
27.49%
Highest Returns
Returns
21.65%
Get Details
2,597 Cr
Returns
24.47%
Highest Returns
Returns
23.35%
Returns
19.37%
Get Details
2,120 Cr
Returns
21.79%
Highest Returns
Returns
19.59%
Returns
18.46%
Get Details
931 Cr
Returns
17.41%
Returns
18.75%
Highest Returns
Returns
18.22%
Get Details
6,032 Cr
Returns
18.6%
Highest Returns
Returns
17.6%
Returns
17.82%
Get Details
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
11,524 Cr
Returns
23.12%
Returns
23.47%
Highest Returns
Returns
22.51%
Get Details
1,278 Cr
Returns
30.3%
Highest Returns
Returns
23.72%
Returns
21.48%
Get Details
3,999 Cr
Returns
25.01%
Highest Returns
Returns
21.37%
Returns
21.09%
Get Details
5,754 Cr
Returns
23.44%
Highest Returns
Returns
19.51%
Returns
20.39%
Get Details
4,690 Cr
Returns
28.29%
Highest Returns
Returns
26.79%
Returns
20.21%
Get Details
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
226 Cr
Returns
13.03%
Returns
14.84%
Highest Returns
Returns
13.4%
Get Details
328 Cr
Returns
11.53%
Returns
12.59%
Highest Returns
Returns
12.55%
Get Details
528 Cr
Returns
9.39%
Returns
11.13%
Returns
11.54%
Highest Returns
Get Details
796 Cr
Returns
11.86%
Returns
12.37%
Highest Returns
Returns
11.54%
Get Details
22 Cr
Returns
11.68%
Returns
12.17%
Highest Returns
Returns
11.37%
Get Details
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
478 Cr
Returns
18.54%
Highest Returns
Returns
17.53%
Returns
16.83%
Get Details
247 Cr
Returns
6.69%
Returns
8.41%
Returns
9.45%
Highest Returns
Get Details
776 Cr
Returns
5.24%
Returns
7.37%
Returns
8.4%
Highest Returns
Get Details
294 Cr
Returns
5.66%
Returns
7.27%
Returns
8.28%
Highest Returns
Get Details
446 Cr
Returns
5.24%
Returns
7.77%
Returns
8.21%
Highest Returns
Get Details

Top ULIP Funds

ULIP Plans Fund Size  NAV Returns
TATA AIA Top 200 Fund 1,259 Cr ₹130.92 20.25%
TATA AIA Whole Life Mid Cap Equity Fund 10,158 Cr ₹112.98 21.46%
ICICI Pru Multi Cap Balanced Fund 2,037 Cr ₹34.46 10.59%
HDFC Life Opportunities Fund 31,393 Cr ₹57.85 18.59%

Overview of a ULIP Plan for 40 Years

A ULIP (Unit Linked Insurance Plan) for 40 years combines insurance and investment. ULIPs provide life coverage while allowing you to invest in market-linked funds. This investment option has the potential to grow over a 40-year period, offering both life protection and wealth accumulation. 

The plan's performance is linked to market fluctuations, providing the potential for returns. Over 40 years, ULIPs can serve as a comprehensive financial tool, offering insurance coverage and wealth creation through systematic investments in equity, debt, or balanced funds.

Working on a ULIP Plan for 40 Years

The working of the 40-year ULIP plan is mentioned in the list below:

  • Combination of Insurance and Investment: ULIP (Unit Linked Insurance Plan) integrates life insurance with investment components.

  • Premium Allocation: You allocate premiums to different investment funds based on your risk appetite and financial goals.

  • Market-Linked Returns: ULIP returns are linked to the performance of chosen funds, which can include equity, debt, or a mix of both.

  • Long-Term Horizon: Tailored for a 40-year duration, ULIPs serve as a prolonged financial tool for insurance coverage and wealth creation.

  • Flexibility: Offers flexibility to switch between funds and adjust asset allocation over the policy term.

  • Risk and Rewards: Performance is subject to market fluctuations, providing both risks and potential rewards over 40 years.

  • Wealth Creation: Systematic investments in ULIPs aim to accumulate wealth over the long term.

  • Maturity Benefits: On maturity, you receive the fund value, providing a lump sum amount based on market performance.

  • Tax Benefits: Eligible for tax benefits under Section 80C and Section 10(10D) of the Income Tax Act.

  • Death Benefits: In case of your demise during the term, beneficiaries receive the higher of the sum assured or the fund value.

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Benefits of a ULIP Plan for 40 Years

The key benefits of a ULIP plan for 40 years are as follows:

  • Long-Term Wealth Creation: Designed for a 40-year horizon, ULIPs facilitate systematic wealth accumulation through market-linked investments.

  • Insurance Coverage: Integrates life insurance with investment, providing financial protection to your beneficiaries in case of your unfortunate death.

  • Flexible Premiums: Allows you to adjust premium payments and choose from a variety of funds based on risk tolerance and financial objectives.

  • Market-Linked Returns: Potential for higher returns as ULIPs are linked to the performance of equity, debt, or balanced funds.

  • Fund Switching: Offers the flexibility to switch between investment funds to adapt to changing market conditions or investment preferences.

  • Tax Benefits: Eligible for tax deductions under Section 80C for premiums paid and tax-free maturity benefits under Section 10(10D).

  • Maturity Benefits: On policy maturity, you receive the fund value, providing a lump sum amount based on market performance.

  • Liquidity: Some ULIPs allow partial withdrawals after a lock-in period, providing liquidity in case of financial emergencies.

  • Risk Management: You can customize your investment portfolio to manage risk and align with your risk tolerance.

  • Comprehensive Financial Planning: Acts as a comprehensive financial tool by combining insurance coverage with long-term investment growth.

Calculation of ULIP Returns in 40 Years

A ULIP calculator can help you estimate the ULIP returns in 40 years in a fast and hassle-free way. All you need to do is enter the following necessary information:

  • Premium Amount: Your planned investment amount per year.

  • Investment Tenure: The duration you intend to stay invested.

  • Expected Rate of Return: The anticipated annual growth rate of your investments (consider historical fund performance and market expectations).

  • Fund Choice: The specific fund or funds within the ULIP you're considering (risk levels vary).

The calculator will display the estimated maturity value of your policy based on the data you provide. You can vary the premium amounts, tenures, rates of return, and fund choices to see how they affect projected returns.

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In Conclusion

Analysing ULIP returns over a 40-year period reveals the potential for substantial growth and wealth accumulation. However, the performance is contingent on market conditions, fund selection, and risk appetite. Despite inherent uncertainties, ULIPs stand as a viable long-term investment option with the capacity to deliver significant returns over the extended horizon. This makes them a consideration for those seeking a balance of insurance and investment benefits.

FAQ's

  • Can ULIPs give higher returns?

    Whether ULIPs can give higher returns depends on the specific plan, the underlying funds, your investment goals, and your risk tolerance. In general, the ULIPs have the potential to offer higher returns than the following investment options:
    • Fixed Deposit Schemes

    • Tax-Saver FDs

    • National Pension Scheme

    • Public Provident Fund (PPF)

    • National Savings Certificate (NSC)

  • Is ULIP good or bad?

    Whether ULIPs are good or bad depends on your individual circumstances and financial goals. Overall, ULIPs can be a good option for some people, particularly those who want to combine life insurance and investment in one product and can afford the higher charges. However, they are not suitable for everyone, especially those who have a short investment horizon, cannot tolerate risk, or require flexibility in accessing their funds.
  • Is ULIP better than FD?

    Deciding whether a ULIP is better than an FD depends on your individual financial situation and goals. 

    If you are looking for a safe investment with guaranteed returns and don't need life insurance, an FD might be a better option.

    If you are looking for higher potential returns and are willing to take on some market risk, a ULIP could be a good choice. Additionally, if you need life insurance coverage, ULIP can be a good option to get both investment and insurance in one plan.

  • Is ULIP better than PPF?

    Whether ULIP is better than PPF depends on your individual financial goals and risk tolerance. If you prioritize life insurance coverage and potentially higher returns and are comfortable with market risk, ULIP might be a good option. If you prefer guaranteed returns, low-risk, and tax-free benefits, PPF is a safer choice.

*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
^Tax benefit are for Investments made up to Rs.2.5 L/ yr.
+Returns Since Inception of LIC Growth Fund
~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.

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