Unit Linked Insurance Plans

What Are Unit Linked Insurance Plans (ULIPs)?

Unit Linked Insurance Plans (ULIPs) combine an investment plan and term insurance. While the investment offers market-linked returns, a term plan provides financial coverage to your loved ones in case of your untimely demise during the policy tenure.

ULIPs were first introduced in 1971 by Unit Trust of India and have since gained popularity in the Indian insurance market. Today, major insurance companies including ICICI Prudential, Bajaj Life, HDFC, and Axis Max Life offer ULIP plans with various features and competitive charges to Indian consumers.

Let's understand ULIP Plans in detail to help you make an informed buying decision.

How Does a ULIP Policy Work?

A portion of the ULIP premium is invested to build wealth based on market returns, while a smaller portion provides life cover. In the initial years, a larger portion of the premium covers plan expenses and charges. Subsequently, the premium is divided into investment and insurance components.

The invested amount is divided into units, allocated to your chosen fund (debt, equity, or a combination). Unit allocation depends on the fund's performance. Due to higher initial expenses, the fund's value may remain low in the first 2-3 years.

ULIP Illustration

Let's understand how ULIPs work with a simple 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 2026

There are several ULIP plans available, but only a few make it to the list of best options. Let's look at the best ULIP plans available in India in 2026.

Overview of Best ULIPs in India in 2026

Invest and secure your life goals by choosing any of the below-mentioned ULIP plans as per your requirements.

Here is a brief overview of the best ULIPs in India in 2026 to help you understand these plans better.

1. 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: It offers the flexibility to choose investment fund options as per your requirements.
   • Death Benefits: If the life assured dies before the risk commencement date, an amount equal to the unit fund value is payable.
   • Maturity Benefit: On maturity, an amount equal to the unit fund is payable to the life assured.
   • Tax Benefit: Tax benefits on paid premiums are available under Section 80C of the Income Tax Act, 1961.

2. 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 premium payment process is convenient, offering multiple modes like credit cards, cheques, internet banking, and auto-debit.
   • Tax benefits on premiums paid under Section 80C 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.

3. 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 adds 1% of annualized premiums to the policyholder's fund value.
   • Policyholders can choose from 10 fund options with unlimited free switching.
   • Flexible premium payment options: Single Pay, Limited Pay, and Regular Pay.
   • Benefit from rupee cost averaging using a systematic transfer plan strategy.
   • Three options help maximize benefits: Invest Plus, Premium Waiver, and Golden Years Benefit.

4. SBI Smart Wealth Assure

   It is an individual, unit-linked, non-participating life insurance product with a single premium payment.

   Key Features of SBI Smart Wealth Assure

   • Flexibility to invest in a 10-year return guarantee fund.
   • Option to choose from a range of funds offering market-linked returns.
   • Policyholders pay a single premium and enjoy benefits throughout the policy term.
   • Liquidity through partial withdrawals after 5 policy years.
   • Option to include an accidental death benefit.

5. ICICI Life Signature

   This savings plan offers market-linked returns and life cover. It also allows systematic withdrawals from the policy.

   Key Features of ICICI Life Signature

   • This plan includes no premium allocation charges.
   • Tax benefits on paid premiums are available under Sections 80C and 10(10D) of the Income Tax Act, 1961.
   • Offers wealth boosters every 5 years, starting from the 10th policy year.
   • Offers life cover until age 99.

6. Bajaj Future Gain

   Bajaj Future Gain is a unit-linked endowment insurance plan designed for maximum fund allocation towards investments, offering high returns and unlimited switching flexibility.

   Key Features of Bajaj Future Gain

   • Offers a choice of multiple policy terms.
   • The plan offers two flexible portfolio strategies to choose from.
   • Offers the option to reduce regular premiums.
   • Provides seven fund options, allowing you to choose as per your convenience.
   • The premium payment mode is easy. The plan offers the option to receive death and maturity benefits in installments (monthly, quarterly, half-yearly, or yearly).

Types of ULIP Plans Available in India

ULIPs in India can be classified by purpose and death benefits.

Classification By Purpose

By purpose, ULIPs are classified into four types.

• ULIP for Retirement: Retirement ULIPs help create a corpus over time, designed to provide benefits during retirement when income sources may be limited.
• ULIP for Wealth Creation: Wealth Creation ULIPs are suitable for individuals in their twenties or thirties, helping them build wealth over time.
• ULIP for Child's Education: Child's Education ULIPs provide benefits at different life stages to support your child's education and secure their future against unforeseen events.
• ULIP for Health Benefits: Health Benefits ULIPs help create a corpus to manage health emergencies, providing financial support during uncertain times.

Classification By Death Benefits

By death benefits, ULIPs are classified into two types.

• Type 1 ULIP Plans: If the insured dies, the nominee receives the higher of the fund value or sum assured as a death benefit. If death occurs early in the policy (when sum assured > fund value), the insurer pays the sum assured.
• Type 2 ULIP Plans: In this plan, if the policyholder dies, the nominee receives both the sum assured and the fund value as a death benefit.

Key Features of ULIP Plans

ULIPs offer several features to help investors achieve financial security. Key features include:

• Choice of Systematic Investment: Beyond insurance coverage, ULIPs facilitate systematic investment planning, allowing you to choose investments and potentially earn good returns.
• Transparency: ULIPs offer transparency with timely updates on your investments in various funds.
• Flexibility: ULIPs offer complete freedom to choose investment options based on your risk profile and allow switching between various fund options.
• Child's Future Protection: ULIPs allow investment in market-linked funds to generate returns, which can be used for a child's education, marriage, and overall future security.

ULIP Riders

ULIP riders are optional benefits that can be added to your policy for an extra premium. Common ULIP riders include:

• Accidental Death Benefit Rider: The nominee receives an additional sum assured from the rider, along with the base ULIP plan's death benefits.
• Waiver of Premium Benefit Rider: If your regular income is impacted due to permanent disability, inability to work, or critical illness, this rider waives all future premiums, ensuring your investment and life cover continue uninterrupted.
• Accidental Permanent Total/Partial Disability Benefit Rider: If the life assured suffers total or partial disability due to an accident, this rider pays a lump sum amount.
• Critical Illness Benefit Rider: When a critical illness specified in the policy strikes, policyholders need financial support. This rider provides a lump sum amount if any covered critical illness occurs during the policy period.
• Family Income Benefit Rider: In case of the life assured's death, accidental permanent total disability, or first diagnosis of a specified critical illness, 1% of the rider sum assured is paid monthly for a minimum of 10 years.

How to Buy ULIPs on PolicyX.com

Buying ULIP plans on PolicyX.com is an easy and hassle-free process. Follow these steps to get started:

1. Scroll to the top-right corner of this page and find "Free Quotes From Top Companies."
2. Enter the required details and click "Continue."
3. Submit your income and city, then click "Proceed."
4. The next page will display various ULIP plans from different insurance providers. Review their features and benefits.
5. Choose a suitable plan and click the "Buy" tab.
6. Complete the payment, and you will receive a soft copy of your policy on your registered email ID.

ULIP Lock-in, Surrender, and Discontinuance Rules

• Lock-in: Every ULIP has a mandatory 5-year lock-in.
• Surrender after 5 years: You receive the full fund value, and cover ends.
• Discontinuing before 5 years: The fund moves to the Discontinued Policy Fund after deducting capped charges. It earns a minimum of 4% p.a. and is paid out only after the lock-in ends.
• Revival: You can usually revive the policy within 3 years by paying pending premiums.
• Tax impact: Early exit may reverse the Section 80C benefit claimed earlier.

Note: Charges and rules vary by insurer. Please read the policy brochure before buying.

Documents Required to Buy a ULIP Plan

• Address Proof: Driving License, Aadhaar card, Voter ID, Passport, etc.
• ID Proof: PAN Card, Aadhaar card, Voter ID, etc.
• Income Proof: Salary slips, Income Tax Returns, bank statements, etc.
• Age Proof: Aadhaar card, Voter ID, Passport, Driving License, etc.