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Unit Linked Health Plan
A Unit Linked Health Plan(ULHP) is a double-benefit plan which provides the investor with a safety net by covering their medical expenses along with a flexible market-based wealth creation opportunity.
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- Unit Linked Health Plan
List of ULIP Funds ~
Fund Name
AUM
NAV
Returns (in %)
3 Year
5 Year
10 Year
Midcap Fund
SBI Life
AUM:64,561 Cr
64,561 Cr
NAV
51.66
0.17%
Returns
15.43%
PRISM Strategy
HDFC Life
AUM:0 Cr
0 Cr
NAV
0.00%
Returns
37.04%
Highest Returns
High Growth Fund
Axis Max Life
AUM:15,248 Cr
15,248 Cr
NAV
126.48
0.22%
Returns
18.02%
Pension India Consumption Fund
ICICI Prudential Life
AUM:25 Cr
25 Cr
NAV
9.68
0.04%
Returns
-
Multi Cap Fund
Tata AIA Life
AUM:11,764 Cr
11,764 Cr
NAV
68.94
0.09%
Returns
13.81%
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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 a Unit Linked Health Plan?
A Unit Linked Health Plan is a type of ULIP plan that divides the premium of the policyholder into two portions. One of these portions is put aside as health cover for the individual, while the remaining is invested in the financial market in the funds of your choice.
The part of the premium that is put towards insurance provides coverage in times of hospitalisation, daycare, surgery, outpatient expenses and critical illness coverage. The remaining part of the premium is diverted towards investments.
What are the Features and Benefits of a Unit Linked Health Plan?
Some common features of a Unit Linked Health Plan are:
- Health Coverage:A health coverage including hospitalisation, daycare, surgery, and outpatient expenses coverage during critical illness is provided with a ULHP.
- Market-based growth:It also allows customers to invest in the market through different types of funds and earn market-linked returns.
- Tax benefits:ULHPs offer tax benefits on premiums as well as the returns earned on your investments.
- Partial Withdrawal: Most ULHPs allow the investor to make partial withdrawals once the 5-year lock-in period is over.
- Top-up FacilityYou can increase your investment amount at any point during the policy term.
- Rider Benefits: Riders such as accidental death benefits, waiver of premium, and hospital cash allowance can be added as riders to the plan.
How Does a Unit-Linked Health Plan Work?
A ULHP plan does not invest your entire premium into a single bucket. It divides the premium and allocates it into two distinct buckets. Let's look at how a ULHP works.
Step 1: Premium is Split
The premium paid by you is split and put into two buckets: Insurance to provide you with health cover. The remaining sum is put into the market.
Step 2: Health Coverage
The portion of your premium allocated for insurance purposes provides you with a safety net against medical expenses. This portion of your premium functions exactly like a health insurance policy.
Step 3: Wealth Creation
The remaining money is invested in the capital market through various funds offered by the ULHP. You can choose between high-risk, high-return equity funds or low-risk, low-return debt funds as per your risk appetite. Investing in a combination of both can provide you with returns and safety.
Step 4: Fund Switching
The Plan also lets you switch between various funds depending on your need of the hour, market fluctuations, financial goals, and risk appetite.
Step 5: Returns
If you face any medical emergency during the policy term, the insurance portion of the plan will cover your medical expenses. After the policy matures, you will receive the accumulated value of your funds.
Example: You invest ₹1,00,00 as your annual premium in a ULHP for 10 years. The health cover for the policy is ₹10,00,000, while the rate of return is 8% p.a., assuming that you split the premium at the ratio 20:80, with 20% of your premium used as health cover and the remaining invested in the market. Let's look at the following table and calculate your returns at the end of the policy term. You can also use a ULIP calculator to calculate your final returns.
| Policy Year | Annual premium paid | Health coverage allocation | Investment allocation | Estimated fund value (8%) |
| Year 1 | ₹1,00,000 | ₹20,000 | ₹80,000 | ₹86,400 |
| Year 2 | ₹1,00,000 | ₹20,000 | ₹80,000 | ₹1,79,712 |
| Year 3 | ₹1,00,000 | ₹20,000 | ₹80,000 | ₹2,80,489 |
| Year 4 | ₹1,00,000 | ₹20,000 | ₹80,000 | ₹3,89,328 |
| Year 5 | ₹1,00,000 | ₹20,000 | ₹80,000 | ₹5,06,874 |
| Year 6 | ₹1,00,000 | ₹20,000 | ₹80,000 | ₹6,33,824 |
| Year 7 | ₹1,00,000 | ₹20,000 | ₹80,000 | ₹7,07,930 |
| Year 8 | ₹1,00,000 | ₹20,000 | ₹80,000 | ₹9,19,005 |
| Year 9 | ₹1,00,000 | ₹20,000 | ₹80,000 | ₹10,78,925 |
| Year 10 | ₹1,00,000 | ₹20,000 | ₹80,000 | ₹12,51,639 |
Note that the rate of return does not remain constant during the policy term and fluctuates as per market performance.
Who Should Invest in a Unit-Linked Health Plan?
Here are some people who may want to consider investing in a ULHP:
- Individuals seeking comprehensive health coverage: Individuals lacking health insurance and who wish for their medical expenses to be covered during emergencies can invest in a ULHP.
- People with a long-term investment window: People who can sustain investments for a long period of time.
- People with a comfortable risk appetite: Since these plans directly invest in the market, people who are comfortable with risk can consider this.
- Individuals looking for flexible products: ULHPs allow an investor to not only invest in various fund options but also allow them to switch funds during the policy term. Individuals seeking such flexibility can invest in a ULHP.
How to Choose the Best Unit Linked Health Plan in India?~
When choosing the best unit-linked health plan (ULHP) in India, there are a few factors you should consider:
- Health coverage and investment needs: Before choosing a plan, consider factors such as your health insurance needs, the coverage you will need, your risk appetite and your investment goals.
- The insurance company: Choose a unit-linked health plan from a reputable and financially sound insurance company. You can check the insurance company's financial ratings and customer reviews online.
Latest ULIP NAVs
| Fund Name | NAV  |
AUM |
5 Yr Returns |
10 Yr Returns | |
|---|---|---|---|---|---|
| SBI Life Balanced Fund | ₹72.28 | ₹20074 Cr | 6.02% | 8.63% | |
| SBI Life Bond Fund | ₹51.56 | ₹15833 Cr | 5.31% | 6.21% | |
| SBI Life Equity Fund | ₹192.78 | ₹81626 Cr | 7.6% | 10.53% | |
| SBI Life Equity Optimiser Fund | ₹54.02 | ₹2606 Cr | 7.75% | 10.19% | |
| SBI Life Growth Fund | ₹92.95 | ₹2868 Cr | 6.7% | 9.86% | |
| SBI Life Money Market Fund | ₹37.7 | ₹489 Cr | 6.02% | 5.9% | |
| SBI Life Top 300 Fund | ₹55.02 | ₹1977 Cr | 6.73% | 10.69% | |
| SBI Life Pure Fund | ₹28.07 | ₹1226 Cr | 7.02% | 9.81% | |
| SBI Life Bond Optimiser Fund | ₹22.69 | ₹3237 Cr | 6.41% | - | |
| SBI Life Bluechip Fund | ₹9.77 | ₹3588 Cr | - | - | |
| SBI Life Balanced Pension | ₹72.73 | ₹857 Cr | 6.49% | 9.5% | |
| SBI Life Bond Pension | ₹45.82 | ₹551 Cr | 5.26% | 6.46% | |
| SBI Life Equity Pension | ₹74.27 | ₹13320 Cr | 7.95% | 11.18% | |
| SBI Life Growth Pension | ₹73.55 | ₹680 Cr | 7.47% | 10.46% | |
| SBI Life Money Market Pension | ₹34.84 | ₹158 Cr | 5.97% | 5.88% | |
| SBI Life Equity Optimiser Pension | ₹58.73 | ₹1063 Cr | 8.11% | 11.12% | |
| SBI Life Top 300 Pension | ₹54.54 | ₹758 Cr | 7.08% | 11.01% | |
| SBI Life Midcap Fund | ₹51.66 | ₹64561 Cr | 15.12% | 16.13% | |
| SBI Life Corporate Bond Fund | ₹16.76 | ₹1028 Cr | 5.22% | - | |
| SBI Life Equity Elite II | ₹50.76 | ₹11905 Cr | 6.85% | 9.84% | |
| SBI Life Index | ₹45.15 | ₹90 Cr | 6.55% | 10.1% | |
| SBI Life Index Pension | ₹47.16 | ₹24 Cr | 6.61% | 10.16% | |
| SBI Life Discontinued Policy Fund | ₹26.01 | ₹10739 Cr | 5.63% | 5.88% | |
| SBI Life Equity Elite | ₹85.24 | ₹12 Cr | 8.98% | 12.53% | |
| SBI Life P-E Managed | ₹38.49 | ₹198 Cr | 7.36% | 8.78% | |
| SBI Life Guaranteed Pension GPF070211 | ₹27.09 | ₹1 Cr | 5.08% | 5.86% | |
| SBI Life Bond Pension II | ₹23.87 | ₹28523 Cr | 5.06% | 5.81% | |
| SBI Life Equity Pension II | ₹40.42 | ₹11525 Cr | 6.61% | 10.38% | |
| SBI Life Money Market Pension II | ₹21.26 | ₹1499 Cr | 5.74% | 5.62% | |
| SBI Life Discontinue Pension Fund | ₹21.97 | ₹6316 Cr | 5.66% | - | |
| SBI Life Group Growth Plus Fund | ₹57.14 | ₹3 Cr | 6.59% | - | |
| SBI Life Group Debt Plus Fund | ₹41.03 | ₹115 Cr | 5.87% | - | |
| SBI Life Group Balance Plus Fund | ₹48.63 | ₹11 Cr | 6.21% | - | |
| SBI Life Group Balance Plus Fund II | ₹27.27 | ₹1218 Cr | 6.67% | - | |
| SBI Life Group Debt Plus Fund II | ₹26.71 | ₹337 Cr | 5.96% | - | |
| SBI Life Group Growth Plus Fund II | ₹26.95 | ₹295 Cr | 7.01% | - | |
| SBI Life Group Short Term Plus Fund II | ₹22.08 | ₹19 Cr | 6.05% | - | |
| SBI Life Group Money Market Plus Fund | ₹14.15 | ₹2 Cr | 3.31% | - | |
| SBI Life Group Balanced Pension Fund | ₹10.25 | ₹154 Cr | - | - |
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- The plan features: Compare the features of different ULHPs before choosing one. Consider factors such as the sum assured, coverage options, investment options, charges, and lock-in period.
- The premium: ULHPs can be more expensive than traditional health insurance plans. However, it is important to choose a ULHP that you can afford to pay the premiums for.
Unit Linked Health Plan Charges
The following table lists all the charges that accompany a Unit Linked Health Plan.
| Charges | Definition |
| Premium Allocation charges | This is the initial charge that an insurer deducts upfront from your premium to cover costs such as underwriting costs, distributor commissions and medical evaluations. The remaining premium gets invested into the policy. |
| Fund Management Charges | This is the charge a company takes from the customer to manage their portfolio while tracking the market. |
| Morbidity Charges | The insurer provides its customer with a safety net through these charges, which are deducted by estimating an individual's hospitalisation needs during a year. This cost is deducted from your fund value. |
| Policy Administration charges | This charge is deducted to keep the policy active on the insurer's servers. |
Risks to Consider Before Investing in a Unit Linked Health Plan
- A significant portion of the ULHP is diverted towards market-based investments. These are directly affected by market volatility. Thus, ULHPs offer no guaranteed returns to the investor.
- Since a large chunk of the premiums is directed directly into the market, the health cover might not be enough in case of an emergency medical procedure, considering the high cost of medical procedures and medicines.
- A lot of charges are included with ULHPs, like morbidity charges, premium allocation charges, fund management charges and policy administration charges. These charges reduce the overall premium, which earns returns on the sum.
- The plan generally needs a lock-in period of 5 years. Additionally, these plans are designed as long-term financial commitments, and if exited early, can lead to returns not justifying the high premiums.
What is the Difference Between ULHP, ULIP and Health Insurance?
The following table lists the differences between ULHP, ULIP and Health Insurance:
| Parameter | ULHP | ULIP | Health Insurance |
| Focus | Health Insurance+Wealth creation | Life coverage + wealth creation | Medical protection |
| Lock-in period | 5 years | 5 years | Generally none |
| Maturity value | Depends on market performance | Depends on market performance | None |
| Investment Risk | Market fluctuations can reduce the final maturity value. Borne by the investor | Market fluctuations can reduce the final maturity value. Borne by the investor | None |
| Core Benefit | Pays medical bills and provides for market-based wealth creation. | Provides life cover along with market-based wealth creation | Pays medical expenses. |
FAQs
-
Are ULHPs eligible for tax benefits?
Yes, ULHP offer several tax benefits in India. Including tax deductions of upto 1.5 lakh under section 80C of the income tax act. -
Can I surrender my ULHP before maturity?
Yes, you have the option to surrender your ULHP before maturity. Note that different insurers can charge you differently on the same, as per their policy terms. -
How can i decide on the best ULHP?
You can choose the best ULHP for yourself by assessing yourself on your healthcare needs, medical expenses, and any predictable medical emergency, along with your long-term financial goals and risk tolerance. -
Are there any exclusions under ULHP?
Yes, there are various exclusions under ULHP. Any procedure which might be considered medically unnecessary is excluded from ULHP coverage. Cosmetic procedures and self-inflicted injuries are also excluded.
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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˜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.