What is the minimum and maximum age to buy ULIP or Term Insurance?

Generally, term insurance can be bought between the age of 18 to 65 years, while ULIPs are usually available from 0 years (child plans) to around 60â65 years depending on the insurer. The maximum maturity age also varies by plan.

Why is term insurance considered essential in financial planning?

Term insurance is considered essential because it provides high financial protection at a very low cost. It ensures that dependents remain financially secure in case of the policyholderâs untimely death.

Which is better for a salaried person, ULIP or term insurance?

For most salaried individuals, term insurance is better for protection because it provides high coverage at low cost. ULIP can be considered only if the person also wants long-term investment discipline along with insurance.

ULIP vs. Term Insurance

If you are planning your financial future, you may have come across ULIP vs Term Insurance many times. Both are popular insurance products, but they are not the same. Term insurance gives pure protection to your family, while ULIP combines insurance with investment in market funds. Because of this difference, many people find it difficult to choose the right one.

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Fund Name

AUM

NAV

Returns (in %)

3 Year

5 Year

10 Year

Midcap Fund

SBI Life

AUM:59,296 Cr

59,296 Cr

NAV

51.63

0.13%

Returns

19.08%

Highest Returns

Returns

16.56%

Returns

17.13%

Get Details

Opportunities Fund

HDFC Life

AUM:35,005 Cr

35,005 Cr

NAV

81.31

0.08%

Returns

15.64%

Highest Returns

Returns

12.96%

Returns

14.21%

Get Details

High Growth Pension Fund

Axis Max Life

AUM:37 Cr

37 Cr

NAV

10.54

0.04%

Returns

22.85%

Highest Returns

Returns

22%

Returns

20%

Get Details

US Technology Advantage Fund

ICICI Prudential Life

AUM:0 Cr

0 Cr

NAV

0.00%

Returns

23.46%

Returns

25.41%

Highest Returns

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Multi Cap Fund

Tata AIA Life

AUM:11,264 Cr

11,264 Cr

NAV

67.55

0.32%

Returns

16%

Returns

21%

Returns

22%

Highest Returns

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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

Overview of a Unit Linked Insurance Plan (ULIP)

A Unit Linked Insurance Plan (ULIP) is a life insurance product that includes investment benefits. A small part of the money goes for life cover and the rest into market-linked funds, like equity, debt, hybrid and index funds. You can choose funds based on how much risk they are willing to take. This investment plan ensures financial stability while you are alive.

Key Features of Unit-Linked Insurance Plan (ULIP)

The main features of a Unit Linked Insurance Plan (ULIP) are mentioned below:

ULIP provides both insurance coverage and investment benefits.
Investment takes place in market-linked funds such as equity and debt.
A mandatory five-year lock-in period applies as per regulations.
Fund switching flexibility allows changes in investment allocation.
Suitable for long-term financial planning and wealth building.

Overview of a Term Insurance Plan

A term insurance plan is a pure life insurance product that provides financial protection to the family in case of the policyholder’s death during the policy term. It does not offer any maturity benefit if the insured survives the policy term, except in special return of premium plans. The main purpose of term insurance is to ensure that the family remains financially secure even in the absence of the earning member.

Key Features of the Term Insurance Plan

The following are some of the key features of a term insurance plan in India:

Term insurance offers a large life cover at a low cost.
Financial protection is provided to the family in case of the policyholder’s death.
No investment or savings component exists in a standard plan.
The structure remains simple and easy to understand.
Suitable for individuals with financial dependents and liabilities.

Key Comparison Between ULIP vs. Term Insurance

Basis	ULIP (Unit Linked Insurance Plan)	Term Insurance
Meaning	ULIP is a combined product that offers life insurance along with market-linked investment options.	Term insurance is a pure life insurance plan that provides financial protection to the family.
Main Purpose	It is designed for both wealth creation and insurance coverage.	It is designed only for financial protection of dependents.
Nature of Product	It works as a hybrid product of insurance and investment.	It is a pure risk-cover insurance product.
Returns	Returns are linked to market performance and are not guaranteed.	No maturity returns are provided in most plans.
Risk Level	It carries market risk because investments depend on equity and debt markets.	It has no investment risk as it does not involve markets.
Flexibility	Offers fund switching between equity and debt options.	No investment flexibility, only life cover remains fixed.
Tax Benefits (2026)	Tax benefits under Section 80C; maturity tax-free only if annual premium is within ₹2.5 lakh limit.	Tax benefits under Section 80C; death benefit is fully tax-free.
Best Suitable For	Suitable for long-term investors who want insurance + wealth creation.	Suitable for individuals who want maximum life cover at minimum cost.
Complexity	More complex due to investment components and charges.	Very simple and easy to understand.
Payout Type	Fund value is paid based on market performance at maturity or exit.	Fixed sum assured is paid on death during policy term.

Fund Name	NAV	AUM	5 Yr Returns	10 Yr Returns
SBI Life Balanced Fund	₹73.04	₹19882 Cr	7.33%	9.19%
SBI Life Bond Fund	₹51.72	₹16422 Cr	5.72%	6.57%
SBI Life Equity Fund	₹195.05	₹76974 Cr	8.81%	10.87%
SBI Life Equity Optimiser Fund	₹54.2	₹2503 Cr	9.54%	10.75%
SBI Life Growth Fund	₹94.31	₹2777 Cr	8.31%	10.5%
SBI Life Money Market Fund	₹37.35	₹501 Cr	5.93%	5.93%
SBI Life Top 300 Fund	₹55.86	₹1903 Cr	8.65%	11.33%
SBI Life Pure Fund	₹27.61	₹1197 Cr	8.35%	10.4%
SBI Life Bond Optimiser Fund	₹22.81	₹3207 Cr	7.15%	-
SBI Life Bluechip Fund	₹9.85	₹3289 Cr	-	-
SBI Life Balanced Pension	₹73.31	₹808 Cr	7.97%	10.02%
SBI Life Bond Pension	₹45.98	₹546 Cr	5.58%	6.82%
SBI Life Equity Pension	₹74.67	₹12146 Cr	9.99%	11.87%
SBI Life Growth Pension	₹74.13	₹634 Cr	8.99%	11.01%
SBI Life Money Market Pension	₹34.53	₹151 Cr	5.89%	5.92%
SBI Life Equity Optimiser Pension	₹57.49	₹980 Cr	9.47%	11.42%
SBI Life Top 300 Pension	₹54.97	₹720 Cr	8.89%	11.53%
SBI Life Midcap Fund	₹51.63	₹59296 Cr	16.56%	17.13%
SBI Life Corporate Bond Fund	₹16.73	₹1031 Cr	5.47%	-
SBI Life Equity Elite II	₹51.21	₹11536 Cr	8.59%	10.44%
SBI Life Index	₹46.25	₹90 Cr	8.83%	10.76%
SBI Life Index Pension	₹48.31	₹25 Cr	8.95%	10.81%
SBI Life Discontinued Policy Fund	₹25.88	₹10597 Cr	5.73%	5.94%
SBI Life Equity Elite	₹86.46	₹12 Cr	11.3%	13.17%
SBI Life P-E Managed	₹38.72	₹199 Cr	8.43%	9.26%
SBI Life Guaranteed Pension GPF070211	₹27.02	₹2 Cr	5.23%	6.27%
SBI Life Bond Pension II	₹23.93	₹28624 Cr	5.44%	6.17%
SBI Life Equity Pension II	₹41.1	₹11046 Cr	8.8%	11.19%
SBI Life Money Market Pension II	₹21.07	₹1524 Cr	5.65%	5.66%
SBI Life Discontinue Pension Fund	₹21.84	₹6502 Cr	5.74%	-
SBI Life Group Growth Plus Fund	₹57.61	₹3 Cr	7.82%	-
SBI Life Group Debt Plus Fund	₹41.13	₹112 Cr	6.41%	-
SBI Life Group Balance Plus Fund	₹49.02	₹10 Cr	7.12%	-
SBI Life Group Balance Plus Fund II	₹26.93	₹1066 Cr	7.13%	-
SBI Life Group Debt Plus Fund II	₹26.75	₹323 Cr	6.5%	-
SBI Life Group Growth Plus Fund II	₹27.09	₹288 Cr	8.15%	-
SBI Life Group Short Term Plus Fund II	₹22.08	₹19 Cr	6.22%	-
SBI Life Group Money Market Plus Fund	₹14.06	₹2 Cr	3.26%	-
SBI Life Group Balanced Pension Fund	₹10.22	₹125 Cr	-	-

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*Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer

Benefits of Term Insurance

Term insurance provides strong financial protection to the family at a low cost.
Dependents receive financial support to manage expenses, loans, and liabilities in case of the policyholder’s death.
The plan is simple, making it easy to understand and manage.
A high life cover is available at a very affordable premium compared to other insurance products.
Leading insurers in India maintain high claim settlement ratios, which improves trust and reliability.

Benefits of ULIP

ULIP offers both life insurance and market-linked investment in a single plan.
Investment returns depend on equity, debt, or hybrid funds chosen by the policyholder.
Tax deduction on premiums is available under Section 80C, up to ₹1.5 lakh per year under the old tax regime.
Maturity benefits are tax-free under Section 10(10D) if annual premium is within ₹2.5 lakh as per current rules.
Fund switching flexibility allows investors to adjust their portfolio based on market conditions for better long-term growth.

Who Should Choose a ULIP Plan?

ULIP is suitable for people who want both insurance and investment in one plan.
It is good for people who are comfortable with ups and downs in the stock market.
It is ideal for long-term financial goals such as 10 to 20 years or more.
It is ideal for investors who prefer disciplined investing through a structured product.

Who Should Choose Term Insurance?

Term insurance is suitable for individuals who have financial dependents, such as family members.
People who want maximum life cover at the lowest possible cost should prefer term insurance.
It is ideal for those who want simple financial protection without investment complexity.
It suits individuals who prefer separate investment planning instead of combining insurance and investment.

Unique Strategy to Invest Between Term Plan and ULIP

To create a solid foundation for you and your family, you can do your investments as per the following suggested strategy:

Start with Term Insurance for solid family protection at low cost—say ₹15,000 yearly for ₹1 crore cover.
Allocate the remaining budget, perhaps ₹50,000, to a carefully chosen ULIP with low charges, equity-heavy funds, and flexible switching.
Term handles pure risk cheaply. ULIP grows wealth through markets, averaging 10-12% returns after the initial lock-in.
You can customise ULIP to fit your risk profile. For steady growth, put your money in a prudent debt fund. For large returns, put your money in an aggressive equities fund.

ULIP vs. Term Insurance – Who is the Winner?

If you want to protect your family, have dependents, or get the most coverage for the least amount of money, choose Term Insurance as your basis. If you want insurance and market-linked growth, add a well-designed ULIP to the investment part. This mix offers full protection and increased possible profits for most consumers.

FAQs

What is the minimum and maximum age to buy ULIP or Term Insurance?

Generally, term insurance can be bought between the age of 18 to 65 years, while ULIPs are usually available from 0 years (child plans) to around 60–65 years depending on the insurer. The maximum maturity age also varies by plan.
Why is term insurance considered essential in financial planning?

Term insurance is considered essential because it provides high financial protection at a very low cost. It ensures that dependents remain financially secure in case of the policyholder’s untimely death.
Which is better for a salaried person, ULIP or term insurance?

For most salaried individuals, term insurance is better for protection because it provides high coverage at low cost. ULIP can be considered only if the person also wants long-term investment discipline along with insurance.