Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term

Protect Your family’s financial future with Kotak e-Term. 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 Lifetime Income Plan

Retirement years are the golden years of life. Know more


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

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

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

  • Mar 28, 2022

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.

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

Kotak e-Invest

Download Brochure


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

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


- A Consumer Education Initiative series by Kotak Life

Similar Articles

7 Secrets that can Make Your Post-Retirement Phase Prosperous

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

Long Term Investment Guide for Your Retirement

How Does ULIP Work in India?

Advantages of Pension Schemes and Retirement Plans

Save Early to Keep Living Your Dreams Post Retirement

Which Pension Plan Suits You best?

5 Reasons to Buy ULIP for a Secured Financial Future

How Safe is it to Invest in ULIP plans?

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

What Happens to ULIP Premiums Paid if the Market Crashes?

What is a Defined Benefit Plan and How it Works?

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

Demystifying the Retirement Planning Process

Invest for your second innings with a guaranteed savings plan

What Are Retirement Pension Plans?

A Quick Guide to Retirement Plans

What is Partial Withdrawal in ULIPs?

Why Should You Invest in NPS?

NPS for Housewife

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

What Are Superannuation Benefits?

What tax benefits are there on saving for retirement?

Benefits of Early Retirement Plans

Terminologies You Should Understand About Retirement Plans

How To Make Most of Your Money After Retirement?

Why You Should Invest In An Annuity Plan?

What is the difference between Life Insurance and ULIP?

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

Is ULIP Better Than FD?

What are Fixed Maturity Plans and Why Should I Invest in Them?

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

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

What are ULIPs and their Types?

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

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

Ten Signs That You're Ready to Retire

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

Pros and Cons of Retirement Annuities

Retirement Planning: Use our Retirement Calculator to Plan Ahead

Types of Pension Plans for Your Retirement

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

Importance of Retirement Planning

Is ULIP A Good Investment Option?

Inflation: A Key Factor to Consider into Retirement Planning

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

A Beginner's Guide to Understanding 401k Retirement Plan

Calculating a Retirement Corpus that can Support Your Lifestyle

What is Fund Value in ULIP?

Top 4 Myths About ULIP Investments You Should Know

Is It Worth Buying ULIP Plans For 10 Years?

Different Types of Retirement Schemes

Retirement Planning at 50? You Are Still Good to Go

How Does NPS Work?

What is a Retirement Plan - What are its Features?

Retirement Planning for Millennials

How should one decide on fund allocation within NPS?

Can I Surrender My ULIP Policy after 2 Years?

Top 6 Reasons Why You Should Get A Pension Plan

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

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

What are the Instruments Available for Building a Retirement Corpus?

Is it possible to live a financially independent life, even after you retire?

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

What are the things to consider before buying ULIPs?

What are the Benefits of ULIP - Explained

Know Why You Should Stay Invested in Your ULIP Plan

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

ELSS vs ULIP: Which is a Better Investment?

5 Steps to Gift a Smart Retirement Plan to Your Parents

Is ULIP a Good Option for People Above 60?

Different Types of ULIP Investments in India

Importance of financial Planning for Retirement

Understanding Annuity Plans

Benefits Of Retirement & How Investments Can Help You Enjoy Them

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

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

How can NPS help you save tax?

Retirement: A New Start to Life!

Retirement Planning Guide for Working Men and Women

What are the Differences Between ELSS ULIP and Mutual Funds?

Meaning of Sum Assured in a ULIP

How Do Annuity Options Work In NPS

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

Which Is Better: ULIP or SIP?

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

How Can I Achieve My Wealth Goal with ULIP Investment?

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

Top 6 Flexible Benefits That ULIPs Offer

Top 4 Mistakes To Avoid While Planning For Your Retirement

Benefits of Early Retirement Planning in India

How Much Corpus Does One Need for Retirement?

Can NRIs Invest in ULIP Plans Offered in India?

5 Common ULIP Myths That You Should Stop Believing

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

How has ULIP Grown Over the Last 3 years?

EPF Grievance Management: All You Need to Know

Retirement planning with a systematic life insurance plan

Saving for approaching retirement with retirement insurance

The Significance of Number 8,000 in Retirement Planning

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

How Has NPS Performed in Comparison with Other Instruments?

What are the Rules for Exit From NPS?

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

Top Investment Options for Retirement Planning

At What Age Should You Start Your Retirement Planning?

How to Maximize Your Retirement Savings with a Pension Scheme in India

Do ULIPs Give Good Returns On Investments?

What is an Annuity Plan, and How Does Annuity Plan Work?

यूलिप और उनके प्रकार क्या हैं?

Tips to invest your voluntary retirement scheme money

यूलिप में 8 शुल्क जो आपको अवश्य जानना चाहिए

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

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

Types of Retirement Plans

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

How To Choose The Right Pension Plan?

How to Win at Retirement Savings?

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

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

Give Your Retirement Savings A Booster-Shot with Annuities

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

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

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

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

FAQs on Taxation of ULIPs

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

Do Pension Plans Allow any Death Benefits?

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

Is ULIP a Complex Financial Product?

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

What is the Minimum Lock-in Period for ULIP?

How Does Pension Plans in India Works?

What are the Charges Levied on ULIP?

5 Notable Investment Options for Retirees

Un-Retirement - Are You Ready For It?

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

What is Lock-In Period in ULIPs?

What Are Mortality Charges In ULIP?

Are Annuities Great For Early Retirement?

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

What are the Uses of ULIP?

ULIP Plan or Traditional Insurance Plans - Which is better?

How To Keep Your Retirement Accounts from Being Hacked?

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

Why ULIP Should Be a Part of Your Investment Portfolio?

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