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ULIP Returns in 15 Years

A 15-year ULIP is a long-term investment option that offers a combination of investment and insurance benefits. It allows you to invest in a mix of equity and debt funds, while also providing you with life insurance coverage. The longer you stay invested, the better your returns will be.

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ULIP Returns in 15 Years

15 Years ULIP Returns
June 26, 2023

Table of Content

 

In this policy, the investment risks in the investment portfolio is borne by the policyholder

Most young people today want to invest and grow their wealth. We’re sure you have several dreams you’d like to achieve. Smart financial decisions today enable you to meet your goals. A Unit-Linked Insurance Plan (ULIP) helps you invest for the future while protecting your family’s finances in the present. Let’s learn more about ULIPs and how a ULIP investment for 15 years can help you achieve your goals.

What Is a 15-Year ULIP Policy?

A 15-year ULIP lets you invest in various market-linked funds for 15 years while providing you with life coverage. Since ULIPs are insurance plans, you pay a regular premium. You decide whether to pay monthly, quarterly, biannually, or annually. The amount gets split into two parts. A small portion goes towards the insurance company’s charges and provides you with life coverage. The company invests the rest in various market-linked funds. Although the insurance company manages the investment, you can choose the funds based on your risk appetite.

How Does a 15-Year ULIP Policy Work?

A ULIP for 15 years works by offering life insurance coverage for the plan duration. During that time, the policyholder can build wealth by investing in various market-linked debt and equity funds. Investors can choose funds based on their personal risk appetite and financial goals.

Let’s understand this better with an example. 45-year-old Anita wants to build up funds for her retirement. She already has a retirement plan but wants to supplement her income and battle the impact of inflation. Since Anita wants to retire at 60, she chooses a ULIP for 15 years. To make an informed decision, she uses a ULIP Calculator to estimate potential returns based on different premium amounts and fund allocations. She pays monthly premiums and decides to invest in more debt funds than equities to safeguard her returns. The life coverage components provide her with peace of mind knowing that her family members will get a significant payout if anything happens to her, helping them maintain their financial stability and standard of living. When Anita retires at 60, the accumulated amount helps her fulfil her retirement goal of travelling.

Why Choose a 15-Year ULIP Policy?

A 15-year ULIP provides several benefits. Let’s learn more.

  • Market-linked Returns

    ULIPs allow you to invest in market-linked debt and equity instruments. They could potentially provide high returns, helping you meet your goals.

  • Flexibility

    ULIPs provide lots of flexibility. You can choose the sum assured and the investment avenues based on your risk appetite. Most plans today also let you make fund switches to make the most of market fluctuations. This flexibility extends to various investor profiles, with options like ULIP for NRI catering to non-resident Indians. Some insurance companies limit the number of changes you can make, so choose a plan accordingly.

  • Tax Benefits

    ULIPs offer tax benefits under Section 80C# and Section 10(10D) of the Income Tax Act. The amount invested enjoys deductions under Section 80C# of the Income Tax Act, 1961.

    Proceeds received on surrender/partial withdrawal/maturity of ULIP plan are exempt from tax subject to provisions mentioned in Section 10(10D) i.e if the premium payable for any of the years during the policy term does not exceeds 10% of the death sum assured.

    In addition to the above, for policies issued after 1st Feb 2021 tax exemption on maturity proceeds will be available if premium paid in any of the years towards such matured polices does not exceed Rs.2,50,000. Out of the total matured policies in a financial year, exemption u/s 10(10D) will be available only towards those polices who’s aggregate premium in any years does not exceed Rs. 2,50,000/.

    Income from rest of the policies exceeding the mentioned limit will be chargeable as capital gains.

    Death proceeds are also exempt from tax for all ULIP plans.

  • Life Coverage

    Your ULIP policy offers life coverage, providing your loved ones with financial security and stability, regardless of what happens to you.

  • Long-term Investment

    The longer you stay invested, the more time you have to let your money grow. Your ULIP returns in 15 years will be much better than returns over five or ten years. These long-term investments help you build financial discipline while enabling you to meet your long-term goals.

How Are 15-Year ULIP Policy Return Rates Calculated?

Your 15-year ULIP rate of return depends on how well the funds perform. The fund’s NAV (Net Asset Value) gets calculated daily, and the returns are calculated based on the change in NAV. You can arrive at the NAV by multiplying the fund’s value by the number of units you hold. Market conditions, economic conditions, and fund management can impact your NAV. While calculating returns, you must also factor in the insurance company’s fees. Every ULIP provider charges administration, mortality, and fund management charges, which impact your investment amount.

A 15-year ULIP lets you invest in equity and debt funds while securing your family’s financial future with life insurance coverage. Before investing, assess your risk appetite, investment goals and current financial situation. You can then select a 15-year ULIP that helps you accumulate a corpus to meet your goals.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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Here's all you should know about ULIP insurance.

We help you to make informed insurance decisions for a lifetime.

What is ULIP Plan? Full Form, Meaning, Benefits and Features

What is ULIP Plan? Full Form, Meaning, Benefits and Features

ULIPs, or Unit Linked Insurance Plans, are insurance cum investment plans that allow you to put money into stocks, bonds, or mutual funds. Read here to know more!

Understanding Advantages & Disadvantages of ULIPs

Understanding Benefits of ULIP Plans

Understanding Taxations in ULIP

ULIPs provide various tax-saving advantages under Section 80C and Section 10(10D) of the Income Tax Act. Check out this article to understand the updated tax rules for ULIPs.

Understanding Taxations in ULIP
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Disclaimers

# Subject to conditions specified u/s 80C and u/s 10(10D) of the Income Tax Act, 1961.

The afore stated views are based on the current Income-tax law. Tax Laws are also subject to change from time to time. Also, the customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.

The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year.

Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.