ULIP Returns in 5 Years

ULIP means Unit Linked Insurance Plan. It is a unique financial instrument that combines insurance coverage with investment opportunities. When evaluating ULIP returns in a 5-year period, one gains insights into the performance of the underlying investment portfolio. This time frame allows you to assess the ability of your ULIP plan to generate returns, considering market fluctuations and the fund's performance.

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Top ULIP Funds
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
1,772 Cr
Returns
23.15%
Returns
27.3%
Highest Returns
Returns
19.47%
Get Details
2,984 Cr
Returns
21.78%
Returns
23.76%
Highest Returns
Returns
17.76%
Get Details
2,475 Cr
Returns
18.83%
Returns
19.17%
Highest Returns
Returns
16.34%
Get Details
1,271 Cr
Returns
15.16%
Returns
18.29%
Highest Returns
Returns
15.89%
Get Details
980 Cr
Returns
17.85%
Returns
18.97%
Highest Returns
Returns
15.65%
Get Details
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
11,839 Cr
Returns
21.83%
Returns
23.81%
Highest Returns
Returns
19.95%
Get Details
6,136 Cr
Returns
26.84%
Returns
27.87%
Highest Returns
Returns
18.81%
Get Details
4,172 Cr
Returns
21.74%
Highest Returns
Returns
20%
Returns
17.43%
Get Details
1,435 Cr
Returns
27.49%
Highest Returns
Returns
24.32%
Returns
16.84%
Get Details
36,694 Cr
Returns
19.19%
Returns
19.75%
Highest Returns
Returns
16%
Get Details
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
247 Cr
Returns
11.88%
Returns
13.92%
Highest Returns
Returns
11.99%
Get Details
352 Cr
Returns
12.26%
Returns
12.56%
Highest Returns
Returns
11.38%
Get Details
526 Cr
Returns
9.79%
Returns
10.72%
Highest Returns
Returns
10.34%
Get Details
837 Cr
Returns
11.67%
Returns
11.81%
Highest Returns
Returns
10.23%
Get Details
22 Cr
Returns
12.6%
Highest Returns
Returns
11.89%
Returns
10.17%
Get Details
Fund Name
AUM
Returns (in %)
3 Year
5 Year
10 Year
494 Cr
Returns
16.43%
Returns
17.28%
Highest Returns
Returns
15.3%
Get Details
242 Cr
Returns
6.94%
Returns
7.91%
Returns
8.81%
Highest Returns
Get Details
786 Cr
Returns
5.4%
Returns
6.88%
Returns
8.1%
Highest Returns
Get Details
302 Cr
Returns
5.86%
Returns
6.8%
Returns
7.79%
Highest Returns
Get Details
465 Cr
Returns
5.1%
Returns
6.93%
Returns
7.78%
Highest Returns
Get Details

Top ULIP Funds

ULIP Plans Fund Size  NAV Returns*
TATA AIA Top 200 Fund Rs. 1,259 Cr ₹130.92 20.25%
TATA AIA Whole Life Mid Cap Equity Fund Rs. 10,158 Cr ₹112.98 21.46%
PNB MetLife Virtue II Rs. 2,155 Cr Rs. 55.06 17.26%
Aditya Birla Capital Pure Equity Fund Rs. 1,804 Cr Rs. 57.44 16.80%
ICICI Pru Multi Cap Balanced Fund Rs. 2,037 Cr ₹34.46 10.59%
HDFC Life Opportunities Fund Rs. 31,393 Cr ₹57.85 18.59%

*Fund returns as of 30 November 2023

What is a 5-Year ULIP?

A 5-Year ULIP, or 5-Year Unit Linked Insurance Plan, is an investment plan that provides the best of both life cover and investment options. It has a lock-in period of five years during which you can’t make partial withdrawals. A part of your premiums goes towards life coverage, while the remainder is invested in market-linked funds. 

You have the flexibility to choose from various funds based on your risk tolerance and financial goals. After the completion of the 5-year lock-in period, you may make partial withdrawals or surrender the policy if needed. 

How Does a 5-Year ULIP Work?

Let us understand the working of the best 5-Year ULIP policy from below:

  • Premium Split: The ULIP plan divides your premium into two parts: life cover and investment plan.

  • Life Coverage: A small portion of your premium ensures life coverage.

  • Investment: The rest of the premium is invested in debt and equity funds based on goals.

  • Fund Management: Your investment funds are handled by a fund manager for optimal returns.

  • Fund Switching: Allows flexibility to maximize returns based on market conditions and financial needs.

  • Financial Security: Life coverage is provided through a death benefit to your beneficiary in case of unforeseen events.

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  • Investment Growth: You get potential high returns through fund investments.

  • Goal Achievement: ULIP provides tailored plans to meet your long-term and short-term financial objectives.

  • Tax Benefits: You can avail of tax benefits under Section 80C and 10(10D) of the IT Act, 1961.

Illustration of a 5-Year ULIP Plan Returns:

Vibhesh is a 30 years old engineer. He aims to purchase a second family vehicle in the short term. His ULIP plan details are as follows:

  • Investment Amount: Rs. 50,000 per year

  • Investment Tenure: 5 years

  • ULIP Plan: Tata Fortune Pro

  • ULIP Fund: Tata Equity Fund (Aggressive)

Now, If he gets an average annual return of 10% p.a. and his policy fee is 1.5% p.a. Using a ULIP Calculator  the estimated returns will be: 

  • Invested Amount: Rs. 30 lakhs

  • Total Maturity Value: Rs. 39 lakhs

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Why to Invest in a 5-Year ULIP Plan?

Let us learn the key benefits of a 5-Year ULIP Plan from the list mentioned below:

  1. Short-Term Investment Horizon:

    • Optimal for short-term investors

    • Ideal for those looking to invest for a brief period

  2. Flexibility:

    • Offers flexibility in premium and fund choices

    • Allows fund switches during the policy term

  3. Tax Benefits:

    • Premiums qualify for tax benefits of up to Rs. 1.5 lakhs under Section 80C

    • Surrender/partial withdrawal/maturity proceeds are tax-exempt under Section 10(10D) if the annual premium paid is less than Rs. 2.5 lakhs 

    • Sum Assured paid to beneficiaries as death benefit is tax-exempt

  4. Life Coverage:

    • Provides life insurance benefits

    • The nominee receives the sum assured in case of the policyholder's demise

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How ULIP Returns in 5 Years are Calculated?

ULIP returns over five years will depend on how well the invested funds perform. The returns are not guaranteed and can fluctuate based on market conditions. Investors can choose between equity funds, debt funds, or a mix of both. Equity funds typically offer higher returns but also carry more risk compared to debt funds. ULIP returns are calculated based on the fund's net asset value (NAV), which represents the fund's assets minus its liabilities.

ULIPs offer a flexible and rewarding investment option for individuals seeking short-term investments with good returns and tax benefits. They provide a structured approach to investing and combine investment with life insurance coverage. Before investing, consult a financial advisor to ensure the investment aligns with your financial goals and risk tolerance.

Summing It Up

ULIP returns over 5 years are contingent on the performance of chosen investment funds, with no guaranteed outcomes. Investors seeking a flexible and potentially rewarding short-term option should consider ULIPs, understanding the influence of market dynamics, fund choices, and associated risks on the final returns.

FAQ's

  • What is the average return of ULIP?

    The average return of ULIP plans varies depending on the specific fund chosen, the investment tenure, and market conditions. However, historically, ULIP plans have offered average annual returns of around 11-20%.
  • Is ULIP good for 5 years?

    Yes, a 5-year ULIP plan can be a good investment option for investors who are seeking long-term growth and are comfortable with a moderate level of risk. Ultimately, whether or not a 5-year ULIP plan is a good investment for you depends on your individual circumstances.
  • Can I withdraw the entire ULIP after 5 years?

    Yes, you can withdraw your entire ULIP investment after the completion of the five-year lock-in period.
  • Can ULIPs give higher returns?

    Yes, ULIPs have the potential to give higher returns than traditional investment options like fixed deposits or public provident funds (PPFs). This is because ULIPs are invested in a mix of assets, including stocks, bonds, and real estate, which can potentially generate higher returns over the long term.

*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
^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
~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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Insurers Offering ULIPs

Tata AIA

Aditya Birla Sun Life

Bajaj Allianz

Max Life

HDFC Life

ICICI Prudential

Bharti AXA Life

Edelweiss Life

Kotak Life

Future Generali

PNB MetLife

SBI Life

Aviva

Bandhan Life

Canara HSBC

IDBI Federal

IndiaFirst

Pramerica Life

Reliance Life

Sahara Life

Shriram Life

Star Union

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