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ULIP vs Endowment Plan
Choosing between a ULIP vs Endowment Plan is one of the most confusing financial decisions. Both combine insurance and savings, but they work very differently. A ULIP vs Endowment Plan comparison becomes important when you want to balance returns, safety, and flexibility. Many investors choose the wrong product because they don’t understand how money actually grows inside each plan. This guide will help you make a clear and practical decision.
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- ULIP vs. Endowment Plan
List of ULIP Funds ~
Fund Name
AUM
NAV
Returns (in %)
3 Year
5 Year
10 Year
Midcap Fund
SBI Life
AUM:61,301 Cr
61,301 Cr
NAV
51.71
-0.31%
Returns
18.84%
Highest Returns
Opportunities Fund
HDFC Life
AUM:35,005 Cr
35,005 Cr
NAV
81.53
-0.32%
Returns
15.45%
Highest Returns
High Growth Pension Fund
Axis Max Life
AUM:37 Cr
37 Cr
NAV
10.5
-0.03%
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:11,264 Cr
11,264 Cr
NAV
67.77
-0.14%
Returns
15.69%
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
What is ULIP?
A ULIP is a plan that gives you life insurance and investment in one product. A part of your money gives you insurance cover, and the rest is invested in market-based funds. The value of your investment depends on how the market performs.
What is an Endowment Plan?
An Endowment Plan is a life insurance policy that offers insurance cover along with guaranteed savings. If something happens to the policyholder during the term, the nominee gets the sum assured and bonuses. It is a safe and steady savings option with life protection.
Difference Between ULIP and Endowment Plan
The major points of difference between ULIP and an endowment plan are mentioned below:
| Basis | ULIP (Unit Linked Insurance Plan) | Endowment Plan |
| Nature of Product | Combines life insurance with market-linked investment in equity, debt, or hybrid funds. | Combines life insurance with guaranteed savings and fixed maturity benefit. |
| Type of Returns | Returns are linked to market performance and may vary over time. | Returns are fixed and guaranteed, with possible bonuses. |
| Risk Level | High risk due to exposure to market fluctuations. | Low risk as returns are not affected by the market. |
| Return Potential | Higher long-term return potential depending on market performance. | Moderate and stable returns with limited growth. |
| Investment Control | High flexibility to choose and switch between funds. | No control over investment once policy is selected. |
| Transparency | NAV-based tracking provides clear visibility of investment value. | Less transparent as returns are pre-decided. |
| Lock-in Period | Mandatory lock-in period of 5 years. | Generally, 2–3 years depending on policy terms. |
| Liquidity | Partial withdrawals allowed after lock-in period. | Limited liquidity; loan facility may be available. |
| Charges | Separate charges like fund management, mortality, and admin charges. | Charges are included in premium and not separately shown. |
| Best Suitable For | Long-term wealth creation with willingness to take risk. | Safe savings with guaranteed returns and low risk preference. |
Which is Better: ULIP vs Endowment Plans?
You can make the right choice between a ULIP plan and an endowment plan as per the following:
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Choose ULIP if:
- You want higher returns in the long term.
- You are comfortable with market risk.
- You want flexibility to switch investments.
- You are planning for long-term goals like retirement or wealth creation.
-
Choose Endowment Plan if:
- You want guaranteed and stable returns.
- You do not want to take any market risk.
- You prefer a simple and fixed plan.
- You are saving for goals where safety is more important than returns.
Who Should Invest in a ULIP
These investment plans are suitable for the following category of investors:
- Young investors (20–40 years)
- People with long-term goals
- Investors willing to take risk
Who Should Invest in an Endowment Plan
The following category of investors should choose to invest in an endowment plan:
- Risk-averse individuals
- People looking for guaranteed returns
- Investors with short to medium-term goals
Latest ULIP NAVs
| Fund Name | NAV  |
AUM |
5 Yr Returns |
10 Yr Returns | |
|---|---|---|---|---|---|
| SBI Life Balanced Fund | ₹73.25 | ₹20111 Cr | 7.59% | 9.18% | |
| SBI Life Bond Fund | ₹51.67 | ₹16252 Cr | 5.66% | 6.54% | |
| SBI Life Equity Fund | ₹196.21 | ₹79317 Cr | 9.34% | 10.87% | |
| SBI Life Equity Optimiser Fund | ₹54.46 | ₹2556 Cr | 9.96% | 10.76% | |
| SBI Life Growth Fund | ₹94.49 | ₹2834 Cr | 8.65% | 10.47% | |
| SBI Life Money Market Fund | ₹37.37 | ₹478 Cr | 5.94% | 5.93% | |
| SBI Life Top 300 Fund | ₹56.12 | ₹1934 Cr | 9.07% | 11.34% | |
| SBI Life Pure Fund | ₹27.69 | ₹1212 Cr | 8.64% | 10.36% | |
| SBI Life Bond Optimiser Fund | ₹22.81 | ₹3264 Cr | 7.21% | - | |
| SBI Life Bluechip Fund | ₹9.91 | ₹3434 Cr | - | - | |
| SBI Life Balanced Pension | ₹73.54 | ₹836 Cr | 8.24% | 10.02% | |
| SBI Life Bond Pension | ₹45.91 | ₹557 Cr | 5.52% | 6.78% | |
| SBI Life Equity Pension | ₹74.98 | ₹12712 Cr | 10.49% | 11.85% | |
| SBI Life Growth Pension | ₹74.26 | ₹659 Cr | 9.33% | 10.98% | |
| SBI Life Money Market Pension | ₹34.55 | ₹153 Cr | 5.89% | 5.92% | |
| SBI Life Equity Optimiser Pension | ₹57.84 | ₹1020 Cr | 9.94% | 11.44% | |
| SBI Life Top 300 Pension | ₹55.17 | ₹737 Cr | 9.29% | 11.54% | |
| SBI Life Midcap Fund | ₹51.71 | ₹61301 Cr | 16.93% | 17.02% | |
| SBI Life Corporate Bond Fund | ₹16.73 | ₹1035 Cr | 5.44% | - | |
| SBI Life Equity Elite II | ₹51.5 | ₹11737 Cr | 9.01% | 10.46% | |
| SBI Life Index | ₹46.6 | ₹90 Cr | 9.33% | 10.81% | |
| SBI Life Index Pension | ₹48.66 | ₹25 Cr | 9.45% | 10.86% | |
| SBI Life Discontinued Policy Fund | ₹25.89 | ₹10629 Cr | 5.71% | 5.94% | |
| SBI Life Equity Elite | ₹87.02 | ₹12 Cr | 11.41% | 13.21% | |
| SBI Life P-E Managed | ₹38.88 | ₹200 Cr | 8.75% | 9.26% | |
| SBI Life Guaranteed Pension GPF070211 | ₹27 | ₹2 Cr | 5.18% | 6.23% | |
| SBI Life Bond Pension II | ₹23.91 | ₹28936 Cr | 5.38% | 6.13% | |
| SBI Life Equity Pension II | ₹41.32 | ₹11368 Cr | 9.33% | 11.19% | |
| SBI Life Money Market Pension II | ₹21.08 | ₹1509 Cr | 5.66% | 5.66% | |
| SBI Life Discontinue Pension Fund | ₹21.85 | ₹6455 Cr | 5.72% | - | |
| SBI Life Group Growth Plus Fund | ₹57.8 | ₹3 Cr | 8.04% | - | |
| SBI Life Group Debt Plus Fund | ₹41.14 | ₹114 Cr | 6.41% | - | |
| SBI Life Group Balance Plus Fund | ₹49.08 | ₹11 Cr | 7.22% | - | |
| SBI Life Group Balance Plus Fund II | ₹26.97 | ₹1208 Cr | 7.23% | - | |
| SBI Life Group Debt Plus Fund II | ₹26.75 | ₹337 Cr | 6.5% | - | |
| SBI Life Group Growth Plus Fund II | ₹27.17 | ₹295 Cr | 8.38% | - | |
| SBI Life Group Short Term Plus Fund II | ₹22.05 | ₹19 Cr | 6.17% | - | |
| SBI Life Group Money Market Plus Fund | ₹14.07 | ₹2 Cr | 3.26% | - | |
| SBI Life Group Balanced Pension Fund | ₹10.23 | ₹128 Cr | - | - |
See more plans
Common Mistakes to Avoid
Here are some of the common mistakes you should avoid while choosing to invest in a ULIP or Endowment Plan:
- Choosing a plan without understanding returns
- Ignoring charges in ULIP
- Expecting high returns from endowment plans
- Buying only for tax savings
- Not checking policy details
Conclusion
The choice between ULIP and Endowment Plan depends completely on what you want from your investment. If your goal is to grow your money over time and you are comfortable with some risk, a ULIP can be a better option. Endowment plans are safer but offer lower returns.
FAQs
-
Can I take loan against ULIP or Endowment Plan?
Loans are generally available only in endowment plans. ULIPs do not commonly offer loan facilities, as they are market-linked products. -
Can I stop paying premium in ULIP or Endowment Plan?
Yes, but the impact is different. In ULIP, your fund value may continue after charges. In an endowment plan, stopping premiums may reduce benefits or make the policy lapse depending on the terms. -
Do endowment plans give guaranteed maturity amounts in all cases?
Yes, endowment plans usually guarantee a maturity amount if you pay all premiums regularly. However, bonuses are not guaranteed and depend on the insurer’s performance.
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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Many investors choose the wrong product between ULIP and a
˜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.