The full form of ULIPs is Unit Linked Insurance Plans. A Unit-Linked Insurance Plan, commonly known as an ULIP, combines an investment plan and term insurance. While the investment offers you market-linked returns, a term plan offers financial coverage to your loved ones in case of your uncertain demise during the policy tenure.
ULIP plans were first introduced in 1971 by Unit Trust Of India and since then these plans have been appreciated by the Indian insurance market. Today, more insurance companies have tapped into the game of ULIP plans and are successfully satisfying the needs of their customers by offering different plans with new-age features at minimal charges. All major insurance companies including ICICI Prudential, Bajaj Life, HDFC, Max Life, and many more offer ULIP plans to Indian consumers.
Let's get a detailed understanding of ULIP Plans so that you can make a better buying decision.
How Does the ULIP Policy Work?
The premium you pay for a unit-linked insurance plan is used to build wealth based on market returns and a very small portion is used to offer you life cover. In the starting years of the plan, a large amount of the premium is used for the plan expenses and charges. Later, the premium is divided into two segments- investment and insurance.
The amount invested is divided into small units. Units are issued for the amount invested in a fund of your choice, whether debt, equity or a combination of both. The allocation of the units relies on the performance of the original fund. In the initial 2 to 3 plan years, the fund's value would stay low because of the deduction of high expenses.
Let’s understand how ULIPs work with a simple premium illustration.
Ramesh, a 35-year-old man invested in the PNB Metlife Mera Wealth ULIP Plan.
Amount invested- Rs 15,000 per month, Investment time- 10 years, Withdrawal time- After 20 years, Lumpsum payout- Rs 1.64 crore, 10-Year returns- 16.1%
Best ULIP Plans in India in 2025
There are several ULIP plans available in the market but when it comes to choosing the best only a few come to the list. Let’s see the best ULIP plans available in India in 2025.
Here is a brief overview of the best ULIPs in India in 2025 to help you understand these plans better.
LIC New Endowment Plus
LIC New Endowment Plus is a Unit-linked, non-participating, regular premium plan which offers investment and insurance coverage during the policy term.
Key Features of LIC New Endowment Plus Plan
Flexibility
If offers the option to choose from investment fund options as per your requirements.
Death Benefits
An amount equal to the unit fund value shall be payable on the death of the life assured before the date of commencement of risk.
Maturity Benefit
An amount equal to the unit fund shall be payable to the life assured on surviving the set date of maturity.
Tax Benefit
You can avail of the tax benefits on paid premiums under sections 80 (C) and 80(D) of the Income Tax Act, 1961
HDFC Life ProGrowth Plus Plan
HDFC Life ProGrowth Plus is a unit-linked insurance and regular premium plan where the premium is invested in the market, thus providing good returns along with various benefits. This plan offers the flexibility to choose investment funds and regular premiums.
Key Features of HDFC Life ProGrowth Plus Plan
The policy offers the flexibility to plan your investment strategy based on return requirements.
The payment-paying process is quite convenient and smooth. It offers access to multiple modes such as credit cards, cheques, internet banking, and auto-debit facility.
Tax benefit on the premiums paid under section 80(C) and 80(D) of the Income Tax Act, 1961
Partial withdrawals to meet unplanned expenses
The plan offers the flexibility to choose from Life and Extra Life options.
The policyholder is allowed to change the frequency of premium payment anytime
HDFC Life Click 2 Wealth
It is a non-participating unit-linked life insurance plan that offers market-linked returns and provides valuable financial protection for you and your family at minimal charges.
Key Features of HDFC Life Click 2 Wealth:
The plan offers 1% of annualized premiums to the policyholder's fund value.
Insured can choose out of 10 fund options with unlimited free switching.
Flexibility in premium payment options i.e., Single pay, Limited, and Regular pay.
Get the advantage of rupee cost averaging using a systematic transfer plan strategy.
Three options under this plan help to maximize the benefits: Invest Plus Option, Premium Waiver Option, and Golden Years Benefit Option.
SBI Smart Wealth Assure
It is an individual, Unit Linked, Non-participating, Life Insurance Product. It is a single premium product where you are required to pay a premium only one time.
Key Features of SBI Smart Wealth Assure
Flexibility to invest in a return guarantee fund for 10 years.
Option to choose from a range of funds offering market-linked returns.
The plan allows the policyholder to only pay once and enjoy the benefits throughout the policy term.
Liquidity through partial withdrawals after 5 years of policy.
Flexibility to choose the product with the accidental death benefit option.
ICICI Pru Signature
This special savings plan can help you get better returns to protect your loved ones with life cover. The plan comes with systematic withdrawals, where you can make regular withdrawals from the policy.
Key Features of ICICI Pru Signature
No premium allocation charges are included under this plan.
Get the tax benefits on the paid premiums under sections 80 (C) and 10 (10D) of the Income Tax Act. 1961.
Offers wealth boosters at the end of every 5 years, starting from the end of the 10th policy year.
Offers the option of life cover till the age of 99 years.
Bajaj Allianz Future Gain
Bajaj Allianz Future Gain is a unit-linked endowment insurance plan that allows maximum allocation of funds towards investments that assist you with huge returns. The plan provides the flexibility of unlimited switches.
Key Features of Bajaj Allianz Future Gain
Provides the option to choose from multiple policy terms
The plan comes out with the flexibility of two portfolio strategies that you can choose as per your needs.
Offers the option to reduce regular premiums as per your requirements.
Provides seven fund options. You are free to choose the desired fund option at your convenience.
The premium payment mode is quite easy and smooth. The plan offers the option to take death and maturity benefits in installments.
The plan offers the option to receive the death/maturity benefit in installments payable on a monthly, quarterly, half-yearly, or yearly basis.
Types of ULIP Plans Available in India
The types of ULIPs available in India can be classified according to their purpose and death benefits .
Classification By Purpose
According to the purpose, ULIPs can be classified into four types.
ULIP for Retirement
ULIPs for retirement help you create a corpus or wealth over a period. These ULIPs are particularly designed in a way to provide benefits at the time of your retirement as you don’t have any income source then.
ULIP for Wealth Creation
These ULIP plans are suitable for someone who has just started, particularly someone who is in their twenties or thirties. With this type of ULIP, you can create wealth over time.
ULIP for Child’s Education
To support the education of your child you can buy a ULIP plan that will offer benefits at different stages of life. There is no doubt in saying that as a parent you want to secure your child's future from an unforeseen event that can ruin their career.
ULIP for Health Benefits
These ULIP plans help you create a corpus to deal with health emergencies in your life. Life is very uncertain and emergencies can arrive at any point.
Classification By Death Benefits
According to the purpose, ULIPs can be classified into four types.
Type 1 ULIP Plans
If an insured dies due to an unfortunate incident, the nominee will receive a higher fund value/sum assured as a death benefit. But if the death occurs at the start of the policy (when the sum assured > fund value), the insurance provider will pay the amount to the nominee.
Type 2 ULIP Plans
In this plan, if the policyholder suffers an unfortunate death, the nominee will receive both - sum assured & fund value as a death benefit.
Funds Options Available With ULIP Plans
There are various fund options available for the policyholder to choose from with their ULIPs.
Cash Funds
These funds come under the category of 'Safe Funds'. By investing in these funds, you will get a selected amount of returns upon their maturity.
Equity Funds
These funds top the list of 'Riskiest ULIP Investment' but offer the highest returns. The company's stock & equities are its domain of investment.
Fixed Interest & Bond Funds
Such funds are famous for giving timely returns and are chosen by those who prefer close to medium risk with prompt rewards. In other words, these funds are a perfect combination of unsecured & secured investments.
Balanced Funds
Such funds are famous for offering medium risks with decent returns. The amount that you pay via premiums is invested in the stock market & corporate bonds.
Riders You Can Avail With ULIPs
ULIP riders are additional benefits that you can add to your existing policy by paying a small premium. Here is a list of ULIP riders that you can choose from:
Accidental Death Benefit Rider
The nominee gets an additional benefit of the rider sum assured along with the death benefits of the base ULIP plan.
Waiver of Premium Benefit Rider
If in case, your regular income is impacted because of some reason such as permanent disability, not being able to work, or a critical illness, then a waiver of premium rider ensures that all the premiums in the future for your ULIP get waived and your investment and life cover will continue without any issue.
In case when the life assured suffers from total or partial disability due to an accident, this rider pays out a lump sum amount.
Critical Illness Benefit Rider
When a serious critical illness mentioned in the policy brochures strikes, policyholders need financial support to get the best possible treatment. Adding a critical illness rider to a ULIP plan helps the insured to get a lump sum amount in case any one of the critical illnesses happens during the policy period.
Family Income Benefit Rider
In case of death of the life assured, accidental permanent total disability or total disability or first diagnosis of any of the specified critical illnesses, 1% of the rider sum assured is paid monthly under this rider for a minimum of 10 years.
Charges Associated with ULIPs
Although ULIPs offer you market-linked returns there are various charges associated with ULIPs.
Name of the charge
Purpose of charge
Premium allocation charges
These charges are imposed by the insurance companies on your principal amount to allocate it to various funds.
Fund management charges
Your invested amount further goes into different types of funds we understood above. To manage these funds a fund management charge is imposed.
Mortality charges
Along with the market-linked returns you will get a life cover. The mortality charge is the cost of life cover offered.
Policy administration charges
To maintain your policy record with the company and manage it efficiently a policy administration charge is imposed.
Switching charges
This is the fee charged to switch the funds in your policy.
Partial withdrawal charges
This is the amount charged to withdraw the partial amount from your corpus amount.
Discontinuance charges
If you want to discontinue your policy during the policy tenure you have to pay discontinuance charges.
Key Features of ULIP Plans
ULIP Policy has several features to assist investors in ensuring financial security against any potential future adversities. Take a look at the below-mentioned features of ULIP Plans:
Choice of Systematic Investment: Apart from insurance coverage, it is also good at systematic investment planning. It allows you to choose your investment and get good benefits in return.
Transparency: One of the best things about investing in ULIP plans is its power of transparency. You will get timely updates about your investments in different funds without breaking a sweat.
Flexibility: It does not force you into investing as it provides complete freedom to choose your investment option as per your risk profile. Also, you can switch between several fund options offered under that ULIP plan.
Child's Future Protection: ULIP plans offer the ability to invest in market-linked funds to earn a good amount of market-linked type returns. The funds can be used further for the child's education, and marriage, to keep your child's future protected and secured.
Benefits of ULIP Plans
There are various benefits of investing in a ULIP policy. Let’s understand these benefits in detail.
Market Linked Returns
It allows you to earn market-linked returns where a part of the premium is invested in market-linked funds that are invested in different forms of investment options such as debt and equity in varying proportions.
Death Benefits
ULIP plans offer death benefits in case of the death of a policyholder during the policy term.
Investment and Insurance Benefits
Unit-linked plans offer triple benefits of tax savings, life cover, and investments. An assured person gets a benefit from a comprehensive life cover based on his/her requirements, budget, and market-linked returns.
Maturity Benefits
ULIP plans come along with maturity benefits in case the policyholder meets the maturity period of the plan. This benefit is provided to the beneficiary in the form of a lump sum of the fund value.
Tax Benefits
You will get tax benefits under Section 80 C and Section 10 (10D) of The Income Tax Act, 1961 if you invest in ULIPs.
Partial Withdrawals
Once you cross the lock-in period of 5 years, you can easily withdraw some amount of money to tackle emergencies.
Who should invest in a ULIP?
The following people should consider investing in a ULIP policy:
Individuals who wish to create long-term wealth
Individuals who wish to create a corpus or long-term wealth can consider investing in a ULIP plan.
Individuals who have medium to high-risk profile
Individuals who have medium to high-risk profiles and want to go the extra edge to maximize their returns can invest in a ULIP.
Individuals with long-term goals
Individuals who have long-term goals in their life including retirement, child education, and marriage can consider investing in a ULIP policy.
How to Buy ULIPs from PolicyX.com
Buying ULIP plans from PolicyX.com is an easy & hassle-free process. All you need to do is follow the below process and be ready to gain ULIP Returns:
Step 1:Scroll up to the top-right corner of this page and find 'Free Quotes From Top Companies
Step 2:Enter the required details and click on 'Continue'.
Step 3:Submit your income, city, and click on the 'Proceed' tab.
Step 4:The next page will show various ULIP plans offered by different insurance providers. You can check out the features and benefits of each of them.
Step 5:Buy a suitable plan by clicking the 'Buy' tab.
Step 6:Make the payment and you will receive the soft copy of your policy on your registered email id.
Documents Required To Buy ULIP Plan
Address Proof:
Driving License, Aadhar card, Voting card, passport, etc.
ID Proof:
PAN Card, Aadhar card, voting card, etc.
Income Proof:
Salary slips, Income tax returns, bank statements, etc.
Age Proof:
Aadhar card, voting card, passport, driving license, etc.
Why Buy ULIP Plans from PolicyX.com?
PolicyX.com helps you find a suitable ULIP policy within a few minutes. You can instantly compare different ULIP plans, evaluate their features according to your needs, and find the best one for yourself. With the help of the ULIP calculator, we offer you a list of companies with their charts of premiums, returns, etc.
100% Free Quotes
Instantly find free quotes from top insurers
Premium Calculator
Calculate the premium amount of different ULIP plans
Transparency
Every call is recorded for security purposes
Customer Profile
A digital platform where customer can check their journey
Easy to Buy
Buy Plans online in just a couple of minutes
Experienced Consultants
A digital platform where customer can check their journey
In a Nutshell
ULIPs or a unit-linked insurance plan is a combination of a term plan and an investment plan. This plan offers your market-linked returns on your investment amount at the maturity date and in case the policyholder dies before the maturity date, death benefits are paid to their nominee. Before choosing a ULIP policy you must check the various things such as associated charges, past performance of the particular ULIPs, number of switches allowed, your financial goals, etc.
If you are confused about which ULIP plan is best then you can contact us at PolicyX.com or call us at 1800-420-0269.
1. How much tax benefit will I get by investing in a ULIP plan?
As per section 80C/80CCC, you can receive a tax deduction of up to Rs.1,50,000.
2. Can I take a loan against my ULIP?
No, that's not possible. The new IRDA rules forbid it.
3. Can NRIs buy a ULIP plan?
Yes, they can buy a ULIP plan.
4. What do you mean by ULIP NAV?
The below formula will help you to understand 'Net Asset Value' in a better manner.
NAV- (Market value of investments held + value of current assets)- (Value of current provision and liabilities)/Total no. of outstanding units till date.
5. Is it possible to revive a ULIP plan?
Yes. All insurance companies provide 2 years (at least) to revive a lapsed ULIP plan. If the insured pays all the premiums during this period, the discontinuance charges will be reversed and the policy will be revived.
6. What is the right time to invest in a ULIP?
There is no right time. It is recommended to start as early as possible to enjoy the best returns.
7. What are the different charges levied on the ULIP Plan?
Surrender Charges:These charges are deducted for partial/full withdrawal of premature units of ULIP documents.
Premium Charges:To avail of the benefits of a ULIP, you have to pay a premium. These charges depend on your payment cycle (monthly, quarterly, half-yearly & annually).
Administration Charges:These charges are systematically deducted to compensate for the expenses that are paid by the insurance company for maintaining a life insurance policy.
Fund Switching Charges:Every unit-linked insurance plan has different fund options in its arsenal. The insurance company allows investors to switch between funds in return for a fee.
Partial Withdrawal Charges:Once the lock-in period is over, investors are allowed to take out a small amount of money to meet their needs. However, they have to pay a charge for it.
8. Are ULIPs suitable for long-term investments?
Almost every ULIP plan in India provides prospects for long-term wealth growth. ULIP plans allow you to safeguard your loved ones with an insurance cover during your working years while also delivering considerable market-linked
returns to support your objectives and life after retirement.
9. When will I be able to withdraw my ULIP?
All ULIP plans have a 5-year initial lock-in period during which your investment is subject to all ULIP policy expenses. Following the end of the lock-in period, you can opt to make a certain number of partial withdrawals
from your ULIP plan in a particular financial year, subject to the plan's terms and conditions.
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