ULIPs Are a Little Tricky But Easy to Make Good Money

Different from a regular insurance policy, a Unit Linked Insurance Plan (ULIPS) gives investors the benefit of both investment and insurance. A part of your investment will go towards ensuring your life and the rest will be invested on your behalf in different plans which you choose. Your life cover will depend on the premium which you pay. The primary benefit which it offers is that there is no need to execute the two transactions separately.

ULIP Plans

Plan starting from ₹1,000/month

Save upto ₹46,800 in Tax under section 80C^{^}

Zero LTCG Tax^¶

In built life cover

Choosing the Right Plan

Make sure that you evaluate your risk appetite and find out what the ULIP offers before you narrow down on a plan. As the investment risk will be borne completely by the policyholder, you need to monitor the policy closely and actively. Before you choose an appropriate plan, ascertain your financial commitments, funding needs, and risk appetite. The choice of the plan should largely depend on your risk appetite, and risk assessment helps in selecting the best SIP.

Why ULIPs are a Little Tricky?

Additionally, it is important to understand the charges which are associated with a ULIP. In the first year, you may have to pay an overhead charge of 25% to 30% of the premium. The entry load for the fund is around 5% while the policy administration charges are around 1.5%. In case of an eventuality, your family will get the insurance amount. As long as there are funds in your account to pay the premium, your life is covered. But when the unit value falls to an extent that it does not cover the insurance, you may be asked to pay the premium failing which the policy will lapse. Further, the portfolio disclosures are not made regularly and openly as in the case of a mutual fund which reduces the transparency quotient of a ULIP.

Deciding on the Financial Goals

If you are looking to invest in a ULIP you should ensure that the goal for which it is used is approximately 10 years away. The charges such as the mortality charges, administration charges, and fund management charges are amortized in the initial few years. Thus, an early exit will not favor the investor. As the impact of cost is less in the long term, less charge will eat into your return.

How ULIPs are Beneficial?

Although a little tricky, a good ULIP plan will yield high returns. An effective plan is one that costs less to give good returns. It should provide adequate life cover and must have proper disclosure with respect to returns and costs in addition to good servicing. Unlike mutual funds, ULIPs have a simpler cost structure. ULIPs offer policyholders the flexibility to choose fund options. They come with an in-built range of funds which can range from aggressive to conservative. You can decide which to choose depending on your investment preferences. ULIPs also offer the choice of switching between different fund options so that you can reap the maximum benefits.

Fund Name	NAV	AUM	5 Yr Returns	10 Yr Returns
SBI Life Balanced Fund	₹73.34	₹22084 Cr	8.63%	10.26%
SBI Life Bond Fund	₹50.23	₹17457 Cr	5.24%	6.88%
SBI Life Equity Fund	₹200.24	₹83975 Cr	11.74%	12.49%
SBI Life Equity Optimiser Fund	₹54.84	₹2728 Cr	11.92%	12.08%
SBI Life Growth Fund	₹94.27	₹3040 Cr	10.52%	11.78%
SBI Life Money Market Fund	₹36.35	₹434 Cr	5.68%	6.04%
SBI Life Top 300 Fund	₹57.07	₹2025 Cr	11.3%	12.87%
SBI Life Pure Fund	₹25.83	₹1192 Cr	10.13%	-
SBI Life Bond Optimiser Fund	₹22.32	₹3285 Cr	7.36%	-
SBI Life Bluechip Fund	₹9.97	₹3014 Cr	-	-
SBI Life Balanced Pension	₹73.51	₹807 Cr	9.18%	11.09%
SBI Life Bond Pension	₹44.56	₹526 Cr	5.11%	7.13%
SBI Life Equity Pension	₹74.8	₹11823 Cr	12.72%	13.24%
SBI Life Growth Pension	₹73.37	₹634 Cr	11.01%	12.24%
SBI Life Money Market Pension	₹33.6	₹138 Cr	5.63%	6.04%
SBI Life Equity Optimiser Pension	₹58.7	₹989 Cr	11.87%	12.87%
SBI Life Top 300 Pension	₹55.23	₹716 Cr	11.26%	12.9%
SBI Life Midcap Fund	₹47.42	₹52995 Cr	19.67%	-
SBI Life Corporate Bond Fund	₹16.3	₹1049 Cr	5.27%	-
SBI Life Equity Elite II	₹51.9	₹12638 Cr	10.86%	11.92%
SBI Life Index	₹48.57	₹112 Cr	12.28%	12.87%
SBI Life Index Pension	₹50.7	₹30 Cr	12.38%	12.9%
SBI Life Discontinued Policy Fund	₹25.23	₹9697 Cr	5.58%	6.09%
SBI Life Equity Elite	₹88.79	₹13 Cr	14%	14.87%
SBI Life P-E Managed	₹38.68	₹231 Cr	9.73%	10.53%
SBI Life Guaranteed Pension GPF070211	₹26.37	₹3 Cr	5.08%	6.83%
SBI Life Bond Pension II	₹23.3	₹29479 Cr	5.03%	6.51%
SBI Life Equity Pension II	₹42.38	₹12763 Cr	12.03%	12.98%
SBI Life Money Market Pension II	₹20.53	₹1549 Cr	5.38%	5.76%
SBI Life Discontinue Pension Fund	₹21.29	₹6566 Cr	5.56%	-
SBI Life Group Growth Plus Fund	₹57.21	₹3 Cr	8.93%	-
SBI Life Group Debt Plus Fund	₹40.17	₹113 Cr	6.34%	-
SBI Life Group Balance Plus Fund	₹48.23	₹11 Cr	7.49%	-
SBI Life Group Balance Plus Fund II	₹26.43	₹809 Cr	7.46%	-
SBI Life Group Debt Plus Fund II	₹26.02	₹232 Cr	6.33%	-
SBI Life Group Growth Plus Fund II	₹26.73	₹240 Cr	9.02%	-
SBI Life Group Short Term Plus Fund II	₹21.38	₹21 Cr	5.9%	-
SBI Life Group Money Market Plus Fund	₹12.44	₹2 Cr	1.03%	-

Fund Name

NAV

AUM

5 Yr Returns

10 Yr Returns

SBI Life Balanced Fund

₹73.34

₹22084 Cr

8.63%

10.26%

SBI Life Bond Fund

₹50.23

₹17457 Cr

5.24%

6.88%

SBI Life Equity Fund

₹200.24

₹83975 Cr

11.74%

12.49%

SBI Life Equity Optimiser Fund

₹54.84

₹2728 Cr

11.92%

12.08%

SBI Life Growth Fund

₹94.27

₹3040 Cr

10.52%

11.78%

SBI Life Money Market Fund

₹36.35

₹434 Cr

5.68%

6.04%

SBI Life Top 300 Fund

₹57.07

₹2025 Cr

11.3%

12.87%

SBI Life Pure Fund

₹25.83

₹1192 Cr

10.13%

SBI Life Bond Optimiser Fund

₹22.32

₹3285 Cr

7.36%

SBI Life Bluechip Fund

₹9.97

₹3014 Cr

SBI Life Balanced Pension

₹73.51

₹807 Cr

9.18%

11.09%

SBI Life Bond Pension

₹44.56

₹526 Cr

5.11%

7.13%

SBI Life Equity Pension

₹74.8

₹11823 Cr

12.72%

13.24%

SBI Life Growth Pension

₹73.37

₹634 Cr

11.01%

12.24%

SBI Life Money Market Pension

₹33.6

₹138 Cr

5.63%

6.04%

SBI Life Equity Optimiser Pension

₹58.7

₹989 Cr

11.87%

12.87%

SBI Life Top 300 Pension

₹55.23

₹716 Cr

11.26%

12.9%

SBI Life Midcap Fund

₹47.42

₹52995 Cr

19.67%

SBI Life Corporate Bond Fund

₹16.3

₹1049 Cr

5.27%

SBI Life Equity Elite II

₹51.9

₹12638 Cr

10.86%

11.92%

SBI Life Index

₹48.57

₹112 Cr

12.28%

12.87%

SBI Life Index Pension

₹50.7

₹30 Cr

12.38%

12.9%

SBI Life Discontinued Policy Fund

₹25.23

₹9697 Cr

5.58%

6.09%

SBI Life Equity Elite

₹88.79

₹13 Cr

14%

14.87%

SBI Life P-E Managed

₹38.68

₹231 Cr

9.73%

10.53%

SBI Life Guaranteed Pension GPF070211

₹26.37

₹3 Cr

5.08%

6.83%

SBI Life Bond Pension II

₹23.3

₹29479 Cr

5.03%

6.51%

SBI Life Equity Pension II

₹42.38

₹12763 Cr

12.03%

12.98%

SBI Life Money Market Pension II

₹20.53

₹1549 Cr

5.38%

5.76%

SBI Life Discontinue Pension Fund

₹21.29

₹6566 Cr

5.56%

SBI Life Group Growth Plus Fund

₹57.21

₹3 Cr

8.93%

SBI Life Group Debt Plus Fund

₹40.17

₹113 Cr

6.34%

SBI Life Group Balance Plus Fund

₹48.23

₹11 Cr

7.49%

SBI Life Group Balance Plus Fund II

₹26.43

₹809 Cr

7.46%

SBI Life Group Debt Plus Fund II

₹26.02

₹232 Cr

6.33%

SBI Life Group Growth Plus Fund II

₹26.73

₹240 Cr

9.02%

SBI Life Group Short Term Plus Fund II

₹21.38

₹21 Cr

5.9%

SBI Life Group Money Market Plus Fund

₹12.44

₹2 Cr

1.03%

Range of Funding Options

The fund options cater to the varying levels of risk appetites. On the aggressive side, the funds are invested mostly in equities which improves returns but increases volatility as well. This requires you to be more careful after the inception of the plan. On the conservative side, the funds are mostly invested in debts and money markets which ensure stable returns and low risk. Depending on your financial capabilities, you can choose to opt for a hybrid plan as well where a portion will be invested in equities and the balance in debts and money market securities.