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ULIP Calculator

Calculate your ULIP fund value after all charges - and compare it with the "Buy Term + Invest in Mutual Fund" alternative to see which builds more wealth.

ULIP vs Term + MF Comparison
Enter the same annual premium for both scenarios. The calculator shows how much charges reduce ULIP returns vs direct MF investing.
Life cover in the ULIP
For same sum assured; check policybazaar
ULIP vs MF

When Does ULIP Make Sense?

Tax-Free Fund Switches

Switching between equity and debt inside a ULIP triggers no capital gains tax - unlike mutual funds where each switch is a taxable redemption. Useful for tactical allocation without tax events.

Tax-Free Maturity (u/s 10(10D))

If annual premium ≤ ₹2.5L, ULIP maturity is fully tax-free. For investors with premium > ₹2.5L/year, maturity gains are taxable as LTCG. Compare with LTCG on MF (10% above ₹1L).

Discipline for Non-Investors

The 5-year lock-in prevents impulsive withdrawals. For investors who struggle to stay invested, the forced savings aspect of ULIP can be a behavioural advantage over a pure MF SIP.

FAQ

Frequently Asked Questions

ULIP (Unit Linked Insurance Plan) combines life insurance with market-linked investment. Part of your premium pays for life cover; the rest is invested in equity/debt funds. 5-year lock-in. Charges include Premium Allocation (0–3%), Policy Admin (₹50–500/mo), Mortality (age-based), and Fund Management (0.5–1.35% p.a.).

Premium Allocation Charge (0–3% upfront), Policy Admin (₹50–500/month), Mortality (age-based, for life cover), Fund Management (0.5–1.35% p.a. of fund value). IRDAI capped total charges so yield drag is max 2.25–3% p.a. vs gross return. These charges significantly reduce long-term returns compared to direct MF investing.

In most scenarios, "Buy Term + Invest in MF" gives higher wealth creation. A ₹1 crore term plan costs ₹10K–15K/year at age 30. The remaining premium in equity MF (12–15% CAGR historically) typically beats ULIP due to lower charges. But ULIP wins on: tax-free fund switches, tax-free maturity (premium ≤ ₹2.5L), and behavioural lock-in for non-disciplined investors.

5-year mandatory lock-in. No withdrawal before 5 years. Partial withdrawals allowed only after 5 years. If you stop paying premiums after lock-in, the policy converts to paid-up. To amortise high early-year charges, continue ULIP for 10–15 years minimum. Surrendering early (before 5 years) incurs surrender charges.

Yes - if annual premium ≤ ₹2.5 lakh (for policies after Feb 2021). Maturity under Section 10(10D) is fully tax-free. If premium > ₹2.5L/year, maturity gains are taxed as LTCG at 10% (above ₹1L). Premiums qualify for 80C deduction (up to ₹1.5L). Death benefit is always tax-free.

Yes. Most ULIPs offer 3–12 free fund switches per year - from equity to debt and back - with no capital gains tax. This is a key advantage over MFs where each switch triggers a taxable redemption. After free switches, each costs ₹100–500. Some plans have auto-rebalancing between equity and debt.