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Single Premium vs. Regular Premium ULIP Plans
Unit Linked Insurance Plans (ULIPs) are popular financial products that combine investment and life insurance. One of the key decisions when purchasing a ULIP is choosing between a single premium and a regular premium payment option. Both approaches have distinct features, benefits, and drawbacks that cater to different investor needs and financial situations.
ULIP Plans
- Plan starting from ₹1,000/month
- Save upto ₹46,800 in Tax under section 80C^
- Zero LTCG Tax¶
- In built life cover
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- Single Premium vs. Regular Premium ULIP Plans
What Are Single Premium ULIP Plans?
Single Premium ULIP Plans are a type of Unit Linked Insurance Plan where you pay the entire premium upfront as a lump sum at the start of the policy. This one-time payment covers both your life insurance and investment components for the entire policy term, eliminating the need for future premium payments.
In these plans, a portion of your lump sum premium goes towards life insurance coverage, while the rest is invested in market-linked funds such as equity, debt, or balanced funds, based on your risk appetite. The returns depend on the performance of these funds, offering the potential for wealth creation alongside insurance protection.
Single Premium ULIPs are ideal for investors with surplus funds who prefer a hassle-free, one-time payment without worrying about missing premiums or policy lapses. They also often come with discounts on ULIP charges due to the lump sum payment.
Investment Return Calculator (Power of Compounding)
- One Time
- Monthly
- Yearly
₹
Top Funds with High Returns (Past 7 Years)
11.71%
Top 300 Fund
13.85%
Opportunities Fund
17.91%
High Growth Fund
12.11%
Opportunities Fund
22%
Multi Cap Fund
13.51%
Accelerator Mid-Cap Fund II
15.02%
Multiplier
12.73%
Classic Opportunities Fund
14.47%
Virtue II
9.97%
Equity II Fund
9.87%
Blue-Chip Equity Fund
14.32%
Growth Opportunities Plus Fund
10.86%
Equity Top 250 Fund
12.71%
Future Apex Fund
10.75%
Pension Dynamic Equity Fund
13.17%
Accelerator Fund
View Plans
What are Regular Premium ULIP Plans?
Regular Premium ULIP (Unit Linked Insurance Plan) plans are financial products that combine life insurance with investment, and investors often ask which SIP is best for achieving long-term financial goals when comparing such structured, long-term investment options. In these plans, you pay a pre-fixed premium amount at regular intervals, such as monthly, quarterly, half-yearly, or annually, throughout the policy term. Each premium payment is split: a portion goes towards providing life insurance coverage, while the rest is invested in market-linked funds like equity, debt, or a mix, based on your risk appetite and financial goals.
Regular premium ULIPs are designed to promote disciplined, systematic investing, making them more affordable since the financial commitment is spread over time rather than requiring a large lump sum upfront. ULIP Tax benefits can be claimed every year under Section 80C for each premium paid. Additionally, regular contributions help average out market volatility, potentially reducing investment risk over the long term.
List of ULIP Funds ~
Fund Name
AUM
NAV
Returns (in %)
3 Year
5 Year
10 Year
Top 300 Fund
SBI Life
AUM:1,981 Cr
1,981 Cr
NAV
52.93
-0.60%
Returns
9.36%
Opportunities Fund
HDFC Life
AUM:35,377 Cr
35,377 Cr
NAV
70.42
-1.31%
Returns
16.52%
Highest Returns
High Growth Fund
Axis Max Life
AUM:12,572 Cr
12,572 Cr
NAV
106.43
-2.22%
Returns
23.1%
Highest Returns
Opportunities Fund
ICICI Prudential Life
AUM:3,551 Cr
3,551 Cr
NAV
54.91
-1.07%
Returns
13.47%
Highest Returns
Multi Cap Fund
Tata AIA Life
AUM:9,938 Cr
9,938 Cr
NAV
58.75
-1.24%
Returns
16.45%
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
Key Differences Between Single Premium and Regular Premium ULIP Plans
| Feature | Single Premium ULIP | Regular Premium ULIP |
| Payment Mode | One-time lump sum | Periodic (monthly/quarterly/annual) |
| Affordability | Requires substantial upfront capital | More affordable, spread over time |
| Convenience | No worries about payment deadlines | Requires regular tracking and timely payment |
| Tax Benefits | Deduction only in the year of payment | Annual deductions for each premium paid |
| Risk | Higher, as investment timing is fixed | Lower, benefits from rupee cost averaging |
| Customization | Limited add-ons/riders | Can add riders and increase cover over time |
Pros and Cons of Single Premium and Regular Premium ULIP Plans
-
Single Premium ULIP Plans:
Pros:
-
Hassle-free, one-time payment—no risk of missing future premiums.
-
No fear of policy lapse due to non-payment.
-
Suitable for those with surplus funds or irregular income.
-
Potential discounts for lump sum payment.
Cons:
-
Large upfront outlay may not suit everyone.
-
ULIP Tax benefit is limited to the year of payment.
-
Less flexibility to add riders or increase cover later.
-
Exposed to market volatility at the time of investment.
-
-
Regular Premium ULIP Plans
Pros:
-
Spreads out the financial commitment, making it more affordable.
-
Enables annual tax benefits under Section 80C for each year premiums are paid.
-
Rupee cost averaging helps mitigate market volatility risk.
-
Greater flexibility to add riders and enhance cover.
-
In case of the policyholder’s demise before maturity, future premiums are not required, but benefits continue.
Cons:
-
Requires discipline and regular income to avoid policy lapse.
-
Missing payments can lead to discontinuation and lower returns.
-
Latest ULIP NAVs
| Fund Name | NAV  |
AUM |
5 Yr Returns |
10 Yr Returns | |
|---|---|---|---|---|---|
| SBI Life Balanced Fund | ₹69.32 | ₹21160 Cr | 7.12% | 9.38% | |
| SBI Life Bond Fund | ₹50.02 | ₹16781 Cr | 5.29% | 6.62% | |
| SBI Life Equity Fund | ₹180.97 | ₹81025 Cr | 8.75% | 11.02% | |
| SBI Life Equity Optimiser Fund | ₹50.61 | ₹2622 Cr | 9.45% | 10.91% | |
| SBI Life Growth Fund | ₹87.94 | ₹2913 Cr | 8.26% | 10.67% | |
| SBI Life Money Market Fund | ₹36.73 | ₹444 Cr | 5.77% | 5.99% | |
| SBI Life Top 300 Fund | ₹52.93 | ₹1981 Cr | 8.92% | 11.71% | |
| SBI Life Pure Fund | ₹24.76 | ₹1150 Cr | 8.18% | - | |
| SBI Life Bond Optimiser Fund | ₹21.86 | ₹3238 Cr | 6.86% | - | |
| SBI Life Balanced Pension | ₹69.68 | ₹805 Cr | 7.78% | 10.25% | |
| SBI Life Bond Pension | ₹44.57 | ₹530 Cr | 5.21% | 6.91% | |
| SBI Life Equity Pension | ₹68.47 | ₹11842 Cr | 9.85% | 11.9% | |
| SBI Life Growth Pension | ₹68.99 | ₹632 Cr | 8.91% | 11.21% | |
| SBI Life Money Market Pension | ₹33.95 | ₹142 Cr | 5.72% | 5.98% | |
| SBI Life Equity Optimiser Pension | ₹54.09 | ₹976 Cr | 9.4% | 11.72% | |
| SBI Life Top 300 Pension | ₹51.63 | ₹710 Cr | 9.04% | 11.83% | |
| SBI Life Midcap Fund | ₹44.87 | ₹55035 Cr | 16.51% | - | |
| SBI Life Corporate Bond Fund | ₹16.32 | ₹1025 Cr | 5.35% | - | |
| SBI Life Equity Elite II | ₹47.83 | ₹12182 Cr | 8.42% | 10.7% | |
| SBI Life Index | ₹43.77 | ₹102 Cr | 9.2% | 11.26% | |
| SBI Life Index Pension | ₹45.67 | ₹27 Cr | 9.31% | 11.29% | |
| SBI Life Discontinued Policy Fund | ₹25.34 | ₹10703 Cr | 5.6% | 5.99% | |
| SBI Life Equity Elite | ₹81.42 | ₹13 Cr | 11.32% | 13.55% | |
| SBI Life P-E Managed | ₹36.35 | ₹215 Cr | 8.16% | 9.51% | |
| SBI Life Guaranteed Pension GPF070211 | ₹26.33 | ₹2 Cr | 4.99% | 6.5% | |
| SBI Life Bond Pension II | ₹23.21 | ₹29088 Cr | 5.08% | 6.26% | |
| SBI Life Equity Pension II | ₹38.26 | ₹12141 Cr | 8.89% | 11.51% | |
| SBI Life Money Market Pension II | ₹20.74 | ₹1532 Cr | 5.49% | 5.72% | |
| SBI Life Discontinue Pension Fund | ₹21.4 | ₹6775 Cr | 5.61% | - | |
| SBI Life Group Growth Plus Fund | ₹54.26 | ₹3 Cr | 7.38% | - | |
| SBI Life Group Debt Plus Fund | ₹39.57 | ₹113 Cr | 6.02% | - | |
| SBI Life Group Balance Plus Fund | ₹46.68 | ₹11 Cr | 6.65% | - | |
| SBI Life Group Balance Plus Fund II | ₹25.69 | ₹869 Cr | 6.75% | - | |
| SBI Life Group Debt Plus Fund II | ₹25.6 | ₹281 Cr | 6% | - | |
| SBI Life Group Growth Plus Fund II | ₹25.52 | ₹237 Cr | 7.73% | - | |
| SBI Life Group Short Term Plus Fund II | ₹21.25 | ₹19 Cr | 5.69% | - | |
| SBI Life Group Money Market Plus Fund | ₹12.49 | ₹2 Cr | 1% | - |
See more plans
Which ULIP Premium Option Should You Choose?
The choice between single and regular premium ULIP plans depends on your financial situation, investment style, and insurance needs:
-
Opt for Single Premium ULIP if:
-
You have a lump sum available for investment.
-
You prefer a hassle-free, one-time transaction.
-
You want to avoid the risk of missing payments or lapsing the policy.
-
-
Opt for Regular Premium ULIP if:
-
You prefer spreading out your payments.
-
You want to maximize annual tax benefits.
-
You value flexibility and the ability to add riders over time.
-
You wish to benefit from rupee cost averaging in volatile markets.
-
Additional Considerations
-
ULIP Charges
Both single and regular premium ULIPs have various charges such as fund management, mortality, and premium allocation charges. Understanding these [ULIP charges] is crucial to evaluating the overall cost and potential returns of your ULIP investment.
-
ULIP Calculator
Use to compare plans, estimate returns, and understand the impact of charges and premium payment modes on your investment outcome.
Conclusion
Both single and regular premium ULIP plans offer the dual advantage of investment and insurance. Your decision should be based on your cash flow, risk appetite, tax planning needs, and convenience preferences. Assess your financial goals carefully to choose the ULIP premium payment mode that aligns best with your long-term objectives.
FAQs
-
What is a single premium ULIP?
A single premium ULIP requires a one-time lump sum payment upfront, securing both insurance coverage and investment for the policy term. -
What is a regular premium ULIP?
A regular premium ULIP involves periodic payments (monthly/quarterly/annually) to keep the policy active and benefit from long-term wealth creation. -
Which offers better tax benefits?
Regular premium ULIPs allow annual tax deductions under Section 80C (up to ₹1.5 lakh per year). Single premium ULIPs offer a deduction only in the year of payment. -
Which is more affordable?
Regular premiums are budget-friendly as costs are spread over time. Single premiums require a large upfront investment but may include discounts. -
How does market risk differ?
Single premium ULIPs expose you to market timing risk. Regular premiums benefit from rupee cost averaging, reducing volatility impact. -
Can I add riders later?
Regular premium ULIPs often allow adding riders (e.g., critical illness). Single premium plans usually lack this flexibility. -
What happens if I miss a regular premium?
Missed payments may lead to a lapse or reduced benefits. Insurers often provide a grace period or revival options. -
Which is better for long-term goals?
Both suit long-term goals, but regular premiums encourage disciplined investing. Single premiums work best for those with surplus funds.
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.