What is the Estimated Return Percentage on ULIP? Do Investors Get Compound Interest?

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

What is the Estimated Return Percentage on ULIP? Do Investors Get Compound Interest?

What is the Estimated Return Percentage on ULIP? Do Investors Get Compound Interest?
  • 28th Mar 2022 |
  • 329

Today ULIPs are considered one of the best investment options in the market. Not only because they give you the benefit of both insurance and investment at once but also because the ULIP returns percentage has been decent over time. So, as an investor, you need to understand that if you opt for good ULIP plans, then it might turn out to be a beneficial, long-term investment, given that you have managed the portfolio with the best performing ULIP funds over the period.

In this article, while knowing about the ULIP returns, you will also learn about the ULIPs return percentage, the tax on ULIPs, the interest calculation process, the provisions for ULIPs under 80C, among other things.

What are ULIP Returns?

When an individual opts for ULIP, along with an insurance policy, he gets a bundle of investment options to choose from. Now, it’s totally up to the risk-taking capability of the individual to handle the investment part of the ULIP policy. So, if you opt for good ULIP plans and want to make more profit, you may go for large-cap equity funds because these funds fall under the high-risk investment bracket. Similarly, if you want to play a little, you can invest accordingly in medium-cap equity funds or small-cap equity funds.

The ULIPs return percentage depends on the nature of investment that the policyholder is opting for. So, you need to be wise while putting the money into the market to make the most out of it. It is suggested to play safe until you completely understand ULIP funds’ nature and the financial markets.

The funds in ULIPs have different natures; some are volatile with the possibility of high returns at high risk, while others offer stable returns at a lower risk.;

How to measure your ULIP returns?

There are two commonly opted ways to estimate your ULIP returns, given that you pay all the premiums of the policy on time and complete the maturity period or the minimum lock-in period.

1. Absolute returns

To calculate using the current and initial NAVs of the policy.

Formula: [(Current NAV – Initial NAV)/Initial NAV] * 100

2. CAGR (Compound Annual Growth Rate)

To calculate the annual growth of the ULIP policy in a given time.

Formula: [{(Present NAV/Initial NAV)^(1/Number of years)} -1] * 100

Why are Best Performing ULIP Funds Important?

No one can predict the best performing ULIP funds, as their performance depends on various factors, and these factors may vary daily. However, the main factor determining the risk and returns of a ULIP policy is asset allocation. So, a balanced asset allocation is advised to counter the losses incurred in one asset by another asset. Additionally, the best part about ULIPS is that you get the option to switch between funds, allowing yourself to maintain pace with the market.

So, for earning decent ULIP returns, you must look for good ULIP plans, check for the portfolio of funds you will be allowed to invest in the plan you have chosen, and keep maintaining a healthy portfolio in the long term.

What are the Tax Exemptions on ULIPs?

As per the latest norms and guidelines related to ULIPs, a policyholder can get tax exemptions on investment of up to ₹1,50,000 per annum.

The ULIP premiums that a policyholder pays on a monthly or yearly basis allows them to avail tax deductions under section 80C of the Income Tax Act for a sum of up to ₹1.5 Lakh per annum. In addition to this, the maturity benefits and funds received at the closure of the policy are also exempted from tax implications under Section 10 (10D).

It is no surprise that ULIP plans offer the best of both worlds; all you must do is lay emphasis on each aspect before investing and keep track of the fund investment to ensure that the returns are sufficient for your financial needs.

Kotak e-Invest

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


  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521


Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Looking for Ways to Earn Lifetime Income in Retirement? Here Are 6 of the Top Options

5 Steps to Gift a Smart Retirement Plan to Your Parents

Understanding Annuity Plans

Inflation: A Key Factor to Consider into Retirement Planning

Saving for approaching retirement with retirement insurance

At What Age Should You Start Your Retirement Planning?

Is ULIP A Good Investment Option?

Getting Close to Retirement? Six Key Retirement Planning Tips That Can Help You Retire

Types of Pension Plans for Your Retirement

What are the 4 Financial Phases of Retirement? How to Budget For Each One?

Benefits of Early Retirement Planning in India

10 Steps to Figure Out How Much Money You Will Need After You Retire

10 Steps to Figure Out How Much Money You Will Need For Your Post Retirement Plans

What is Fund Value in ULIP?

What is Partial Withdrawal in ULIPs?

Does Having Both ULIP Plan and Other Health Insurance Plan Make Sense?

What are the Advantages and Disadvantages of ULIP?

How Safe is it to Invest in ULIP plans?

Different Types of Retirement Schemes

Is it Advisable to Withdraw the ULIP Insurance Policy After 5 Years?

How is ULIP NAV calculated? How is the return calculated in ULIP?

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

How Much Corpus Does One Need for Retirement?

How can NPS help you save tax?

5 Retirement Planning Tips for a Financially Controlled Post-Employment Life

What are the Instruments Available for Building a Retirement Corpus?

Meaning of Sum Assured in a ULIP

Retirement Planning - How To Calculate Your Retirement Premium in India?

Are Annuities Great For Early Retirement?

Retirement Planning Guide for Working Men and Women

Is ULIP a Complex Financial Product?

NPS for Housewife

Top 4 Myths About ULIP Investments You Should Know

Can NRIs Invest in ULIP Plans Offered in India?

Benefits of Early Retirement Plans

Demystifying the Retirement Planning Process

How Quickly is Fund Switch Effected in ULIPs? Is it Done the Same Day or After a Particular Number of Days?

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

What tax benefits are there on saving for retirement?

Why Should You start Retirement Planning as soon as you start a job?

ULIP Tax Benefits: यहां निवेश करने पर मिलते हैं 5 बड़े फायदे

Difference Between Unit-Linked Insurance Plans and Non-Linked Plans

Un-Retirement - Are You Ready For It?

Benefits Of Retirement & How Investments Can Help You Enjoy Them

How Does Pension Plans in India Works?

5 Common ULIP Myths That You Should Stop Believing

ULIPs or Pension Plans – Which is a Better Retirement Plan?

How To Choose The Right Pension Plan?

Long Term Investment Guide for Your Retirement

Do ULIPs Give Good Returns On Investments?

8 Charges in ULIP That You Must Know

What are the Rules for Exit From NPS?

Do Pension Plans Allow any Death Benefits?

How Can ULIPs Help You Plan for Your Child's Future?

Retirement Planning Guide: These 5 Steps Will Help You Towards a Safe, Secure and Fun Retirement

How has ULIP Grown Over the Last 3 years?

What Happens to ULIP Premiums Paid if the Market Crashes?

What is NAV in ULIP, and How is it calculated?

A Quick Guide to Retirement Plans

Why Should Retirement Planning Be on Top of Your Priority List?

Invest for your second innings with a guaranteed savings plan

Top 6 Reasons Why You Should Get A Pension Plan

How To Make Most of Your Money After Retirement?

Retirement Planning for Millennials

Which are the Best ULIP Plans in India for Children?

How Has NPS Performed in Comparison with Other Instruments?

FAQs on Taxation of ULIPs

Why You Should Invest In An Annuity Plan?

What Are Mortality Charges In ULIP?

What are ULIPs and their Types?

Different Types of ULIP Investments in India

Which Pension Plan Suits You best?

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

Calculating a Retirement Corpus that can Support Your Lifestyle

Is ULIP Better Than FD?

Why Are ULIPs Called Flexible Investments?

Save Early to Keep Living Your Dreams Post Retirement

What is the Minimum Lock-in Period for ULIP?

How Does NPS Work?

5 Reasons Why ULIP Plans are One of The Best Retirement Planning Instruments

Are You Planning an Early Retirement? Here's Why Buying Annuity Plan Will Make Sense

Top 4 Mistakes To Avoid While Planning For Your Retirement

Annuity Plan | How to Choose the Right Annuity Plan | Kotak Life

Tips to invest your voluntary retirement scheme money

Is It Worth Buying ULIP Plans For 10 Years?

Give Your Retirement Savings A Booster-Shot with Annuities

Why Should You Invest in NPS?

What are the Chances of Losing all my Money in ULIP and How Much Return Should I Expect?

What is the Death Claim Payable in the Case of ULIP?

What are the things to consider before buying ULIPs?

Retirement planning with a systematic life insurance plan

A Beginner's Guide to Understanding 401k Retirement Plan

How To Keep Your Retirement Accounts from Being Hacked?

Who Gets the Benefit After the Maturity of ULIP: The Proposer or The Life Insured?

ULIP: Can You Surrender ULIPs or Withdraw Money from It?

Types of Retirement Plans

What are the Benefits of ULIP - Explained

What Are Retirement Pension Plans?

Is it Suggestible to Take a ULIP Plan Linked with a Term Plan?

How To Calculate The Present Value And Future Value Of Annuities?

How Do Annuity Options Work In NPS

Why ULIP Should Be a Part of Your Investment Portfolio?

Why Should I Invest in ULIP?

Pros and Cons of Retirement Annuities

Types of Annuity Plan | Annuity Definition - Meaning & Key Benefits | Kotak Life

What are the Differences Between ELSS ULIP and Mutual Funds?

Retirement: A New Start to Life!

How Can I Achieve My Wealth Goal with ULIP Investment?

How to Build a Tax-Free Pension Income for Retirement?

Retirement and Pension Plans in India- What are Your Options?

What is Lock-In Period in ULIPs?

Here's What Retirement Would Look Like 30 Years From Now

How to Win at Retirement Savings?

ULIP Plan or Traditional Insurance Plans - Which is better?

What is an Annuity Plan and How Does Annuity Plan Works | Kotak Life

How should one decide on fund allocation within NPS?

How To Invest Money In ULIP?

What is a Retirement Plan - What are its Features?

Managing Your Retirement Income with an insured retirement plan

6 Signs That You Are Not Financially Ready For An Early Retirement

Worried About Running Out of Money in Retirement? 4 Tips to Avoid This Crisis

What are the Maturity Benefits in a ULIP Plan: Fund Value Sum Assured or Only Fund Value?

Can I Surrender My ULIP Policy after 2 Years?

What Happens If I Stop Paying My ULIP Policy Premium After Paying the First Premium? Will I Still Get The Return?

How to Choose the Best ULIP Plans to Invest in 2022?

The Significance of Number 8,000 in Retirement Planning

What is the Difference Between EPF, VPF, and PPF? What are Their Tax Benefits?

5 Notable Investment Options for Retirees

What are the minimum and maximum investment in ULIP? Would the Whole Amount Insured in The ULIP Insurance be Invested in the Market?

What is ULIP and Its Benefits?

What Are Superannuation Benefits?

What are the Uses of ULIP?

How Does ULIP Work in India?

Ten Signs That You're Ready to Retire

ELSS vs ULIP: Which is a Better Investment?

7 Secrets that can Make Your Post-Retirement Phase Prosperous

Why are ULIPs One of the Best Tax Saving Instruments?

Is the ULIP Policy Surrender Value Taxble?

Top Investment Options for Retirement Planning

Is ULIP a Good Option for People Above 60?

What are the Charges Levied on ULIP?

Importance of financial Planning for Retirement

Single Premium ULIP or a PPF - Which One is Better?

Advantages of Pension Schemes and Retirement Plans

What is the difference between Life Insurance and ULIP?

Terminologies You Should Understand About Retirement Plans

यूलिप के फायदे (Benefits of ULIP in Hindi)

What To Do With Your Retirement Accounts During An Employment Lapse?

यूलिप के 8 शुल्क

Importance of Retirement Planning

Which Is Better: ULIP or SIP?

Top 6 Flexible Benefits That ULIPs Offer

Know Why You Should Stay Invested in Your ULIP Plan

5 Reasons to Buy ULIP for a Secured Financial Future

Retirement Planning at 50? You Are Still Good to Go

What is Premium Redirection in ULIPs Plans | ULIP Insurance Plans | Kotak Life Insurance